This week, I would like to review Proposal 2012-01, the Referendum on Public Act 4 of 2011, the Local Government and School District Fiscal Accountability Act, one of six proposals on next month’s ballot. The other five Proposals on the ballot attempt to amend the Michigan Constitution. Proposal 1 asks the citizens to either reinstate or repeal PA 4. PA 4 was suspended on August 8 when the Board of Canvassers was directed by the Michigan Supreme Court to place Proposal 1 on the November 6 ballot. I have read much about the pros and cons of this proposal. I have heard eloquent speakers exhorting us to reinstate PA 4 and eloquent speakers exhorting us to repeal PA 4. It’s an issue that can get the emotions boiling. PA 4 allows the state to appoint an emergency manager with the power to make all of the decisions for a financially distressed local government. When I write “all”, this means including making financial as well as non-financial decisions for the community. In other words, the financial manager is granted expanded powers that exceed those granted to officials elected by the local taxpayers, including terminating existing agreements and relieving a local council or commission of its’ responsibilities. That’s a lot of power granted to an appointed, non-elected official. The state has been appointing emergency managers since 1988 when Ecorse encountered a financial emergency. Since then, among others, cities such as Hamtramck in 2000, the Detroit Public Schools in 2009, and the city of Benton Harbor in 2010 have had emergency financial managers appointed to take total control of running their operations. The state maintains that local control as provided for in our constitution can be changed by state law. PA 4 just changed the existing state law and gave more power to the emergency financial manager. It is Michigan’s position that this additional power is required to protect the public. The opponents of PA 4 say this additional power is a threat to democracy. The present economy of Michigan has put many municipalities in difficult financial positions. Property tax income has dramatically decreased. Michigan revenue sharing has dramatically decreased. Operating costs continue to increase. Even in these difficult times, however, the public has to be protected. I’m just not sure PA 4 is the answer. Giving one person total control over everything could easily turn into a threat to democracy. Not many people can be given absolute power and make it work. Actually, this is an example of the public using the polling process to either over-turn or approve a law. I like the process. If we turn down PA 4, the state will revert to the previous statute and will probably work on passing a revised PA 4. If we approve PA 4, PA 4 lives and probably the state will still work on passing a revised statute. After all, no one wants to be known for passing a law that is called a threat to democracy. It makes getting re-elected a little harder.
A federal law that is about as contentious as PA 4 is the Affordable Care Act of 2010 or health care reform. Emotions for those in support of the ACA run high. Emotions also run high for those who believe that the ACA goes too far. It sounds just like PA 4 to me. Maybe we need to put the ACA on the ballot. Part of the problem as I see it is, as with PA 4 with its’ emergency financial manager, people who were appointed and not elected are making rules and important decisions that materially affect all of us. For example, the Department of Health and Human Services makes a ruling that employers, with a few exceptions, must provide no cost contraceptives to employees. The option for employers who disagree with this ruling is to file a court complaint and there have been several filed through-out the nation over this issue. Similar to PA 4, the employers are calling the ACA a threat to democracy while the federal government is holding the line that the public needs to be protected. These are important court cases. I will keep you informed as they are ruled upon. Is the ACA a threat to democracy or is it protecting the public? Now that’s a big question. This is Jerry Coon signing off.
Jerry Coon is an Enrolled Agent and
Registered Tax Return Preparer.
He owns Action Tax Service on
Northland Dr in Rockford.
His website is www.actiontaxservice.com