"The Spirit of Detroit" (DetroitDerek, Flickr)

Over 1000 senior citizens are staging a protest in the Michigan capital of Lansing tonight in opposition to Tea Party Governor Rick Snyder’s tax plan that removes tax exemptions for retirement pensions, which will bring in up to $900 million in revenue to the state government. This follows announcements that Governor Snyder plans $1.8 billion in tax cuts to corporations and $600 million in cuts to funding for education in the state. Detroits public schools are already likely to raise class sizes to 60 students per classroom after state financial emergency officials have order the city to close 50% of its schools.

Meanwhile, Governor Snyder is expected to sign a new emergency finance bill that is highly controversial to say the least. The bill has passed both the Republican Senate and the Republican House and it grants sweeping powers to the Governor to eliminate the locally elected government of municipalities that are under a financial emergency to replace them with Financial Emergency Managers, who ostensibly oversee the town’s financial recovery. How does a city know it is in a financial emergency? The Governor gets to say so, and he has the power to appoint the manager, while declaring all existing union and worker’s contracts null and void. The law also allows corporations to take control, represented by the Financial Manager appointed by the Governor.

Check here for the complete text of the Emergency Financial Manager bill

Michigan Congressional Representative John Conyers has made the following statement about the bill:

The takeover provision of the legislation – allowing the dissolution of locally elected bodies — implicitly targets minority communities that are disproportionately impacted by the economic downturn, without providing meaningful support for improved economic opportunity.

Worse yet, this bill raises serious constitutional concerns. Article I, Section 10 of the U.S. Constitution explicitly prohibits any State from impairing a contract, which is exactly what this legislation does. As the Supreme Court has held in Home Building & Loan Association v. Blaisdell (1934), the sanctity of contracts cannot be impaired by a state law “which renders them invalid, or releases or extinguishes them . . . . Not only are existing laws read into contracts in order to fix obligations as between the parties, but the reservation of essential attributes of sovereign power is also read into contracts as a postulate of the legal order.”

Further, the bill empowers this financial czar with the Governor’s approval to force a municipality into bankruptcy, a power that will surely be used to extract further concessions from hardworking public sector workers. And, by making the risk of bankruptcy a reality, the bill will make it more not less expensive for municipalities to obtain financing given this risk, which will make the financial circumstances of municipalities even worse.

Conyers describes the situation well. This bill could encourage corporate representatives to run for office and drive a town into the ground so that it can be taken over by his or her company. It represents another corporate takeover of public interests, just of the sorts found in Wisconsin Governor Walker’s Budget Proposal. This is about a power grab because State Senator Gretchen Whitmer (D-East Lansing) and others attempted to cap the salary of the financial managers at $150,000 per year, but the response was to encourage cash-strapped schools to invite volunteers to teach in their classrooms. Watch here:

Michigan State Senator Gretchen Whitmer (D-East Lansing) speaks out against Emergency Financial Manager bill (Michigan Senate Dems, YouTube)

Big protests are expected in Michigan today in Lansing! Good luck everyone!

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