Election leaves Michigan's Emergency Manager Law in Doubt

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Michigan's ballot proposals were soundly defeated Tuesday, except the state's emergency financial manager law.

It wasn't until Wednesday morning, that results showed voters have rejected Public Act 4, a tougher version of Michigan's old financial manager law.

Public Act 4 was designed to help struggling cities and school districts survive a financial crisis, but many called it an over reach.

While voters turned down proposal one, Governor Rick Snyder maintains the law was working. Of Michigan's eight emergency managed communties and districts, he says three were transitioning out of management.

"If we don't have those same tools are we going to end up with emergency managers longer than I would like? That was one of the good parts about having the law," Snyder said.

Union leaders see it differently.

"That was a big win for the democratic process," Ray Holman, with UAW Local 6000 said. "The fact that the governor can send in a manager and kick out elected officials and rip up collective bargaining contracts is a bridge to far."

The governor says the state now reverts back to Michigan's old financial manager law, a weaker version from the 1990's giving managers only limited powers.

Snyder says they have an attorney general's opinion backing that up, but Public Act 72 is being challenged in court.

"If it was found Public Act 72 wasn't around there wouldn't really be any emergency manager law and that would be a concern in my view," he said.

According to Snyder, financially troubled communities would have no option but bankruptcy. That could drive up costs and impact credit and interest rates. Snyder plans to meet with house and senate leaders to talk about passing a replacement law or tweaking the existing Public Act 72.

Either way, he says lawmakers must tread carefully and gather feedback.

"The public spoke on this, but it's hard to identify what were the key issues and the drivers in that vote," Snyder added.

Union leaders remain uneasy about emergency managers, but embrace that team approach.

"When we work together we can win," Holman said.

The court hearing on Michigan's old financial manager law will come after Thanksgiving.

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