Advancement Project

March 24, 2011

Michigan: The Latest Attack on Democracy and the American Middle Class

The latest initiatives to destroy the rights of working people and democracy in America passed through the Michigan legislature, and were signed by Governor Rick Snyder last week. In addition to the pernicious tax reforms included in his budget, which raise taxes on the middle-class while lowering taxes levied on corporations, the governor issued a shocking blow to the democratic process when he signed the “Local Government and School District Fiscal Accountability Act.” This law gives the governor power to declare any municipality to be in a state of “financial emergency,” and then appoint an “Emergency Manager” who is endowed with sweeping authoritarian power to bypass all levels of local government and institute policy according to his or her own whims.

The Governor, elected as a “moderate” Republican, instituted a new tax policy which he claims will put the state in a better financial position. Unfortunately for seniors and poor people of Michigan, he intends to achieve this by taxing pensions and eliminating earned income tax credits. These changes will result in $1.7 billion increase in additional taxes levied on some of the most vulnerable populations in the state. Those who want to raise taxes on working families may argue that it is a necessary evil in order to balance the state budget. If this is this case, one might ask why he is giving all of this increase in revenue away in a 60% tax break for corporations and businesses.

The language in the “Emergency Financial Manager” law implies that budgetary shortfalls in local municipalities result from financial incompetence by elected officials. Surprisingly, the legislation fails to acknowledge or address any of the real causes of the state’s financial difficulties—mainly, persistently high unemployement and a severe lack of demand resulting from the economic crisis. The new tax code will strip more money from low-income Americans and seniors which will further reduce demand in the economy, while giving tax breaks to corporations, many of which are currently operating below full capacity. The Michigan legislature has ignored the true root causes of the state’s hardship, and instead has given the governor sole authoritarian power to appoint a Manager who can take control away from elected officials and impose his or her own policies to govern cities and towns, without accounting for the will of the public. The legislation gives the “Emergency Manager” the power to:

• Reorganize school districts and change the educational plans of schools;
• Allow schools to default on all contracts entered into at the discretion of the “executive officer,” except bond payments;
• Place any schools deemed “unsatisfactory” to be placed in a new “state school reform/redesign districts” wherein the Governor executive officer has all the powers of the school board and superintendent;
• Reject, modify or terminate any contract the town has entered into, including collective bargaining agreements;
• Prohibit local elected or appointed officials or employees of the local government from access to the local government’s office facilities, electronic mail, and internal information systems;
• Exercise solely, on behalf of the local government, all other authority and responsibilities of the chief administrative officer and governing body;
• Suspend or dismiss elected officials; and
• Disincorporate or dissolve entire city governments.

The purpose of this bill is not to prevent municipalities from insolvency, since it is well-established that the financial woes experienced by cities and town are not due to mismanagement from elected officials, but result from the economic downturn—the worst since the great depression—and an ongoing history of deindustrialization. Like the union-busting bill recently passed in Wisconsin, this legislation is about power—destroying what little is left for the middle class—by giving the governor sole discretion to essentially cancel any union contract at will, fire publicly elected representatives, and dissolve or disincorporate entire cities and towns. Like Wisconsin, Florida, and elsewhere across the country, state governments have decided that when economic times get tough, it’s the middle and working-class citizens that must sacrifice, while the business community continues to receive breaks. All the while, unions are portrayed as public enemy #1. The massive public protests of the past few days may be an encouraging sign that America’s middle-class has finally taken enough abuse. One can only hope this will translate into policy changes in the coming future.