Repeal PA 312 to Eliminate Binding Arbitration for Police and Firefighters?

The Detroit News is highlighting ideas from various groups to promote discussion on reform, restructuring government and the economy.

Idea 2: Eliminate binding arbitration for municipal police and fire workers.

“Why: Public Act [312] is four decades old and prevents police and firefighters from going on strike by mandating that labor disputes be settled by third party, binding arbitration. Arbitrators do not take into consideration the financial status of local governmental units or their ability to pay the awards mandated by the arbitrators. Public safety costs amount to as much as half of an average city budget. Current law prevents money-saving consolidation of police and fire departments and can drive pension benefits to the point where, in some cases, retirement incomes are greater than wages when officers are still on the job.

Benefit: Economic studies estimate that removing binding arbitration could result in a 3 percent to 5 percent reduction in local government expenditures. Local governments in Michigan spent $2 billion on public safety in 2006. A 4 percent reduction would amount to annual savings of $80 million statewide. Not only would repealing Public Act 312 directly reduce costs to municipalities and help them manage their budgets, it would also provide flexibility to achieve efficient and cost-effective consolidation and collaboration among Michigan's 1,800 units of local government.

How: The state Legislature would have to repeal Public Act 312.

Obstacle: Public safety unions (such as the Michigan Association of Police, Michigan Professional Fire Fighters Union and Police Officers Association of Michigan) argue PA 312 does exactly what it was intended to do and this is prevent strikes. They also contend repealing PA 312 is an attempt to solve a problem affecting a small amount of municipalities with a statewide solution.

Sources: Business Leaders for Michigan and Center for Michigan. “

My Comments: We must all be thankful for our police and firefighters who risk their lives in serving us – in protecting our lives and properties. However, that does not mean we need to approve every demand that their unions make. While proper wage and benefits must be paid our public employees, PA 312 has resulted in unsustainable levels of compensation set by arbitrators without regard to the municipalities ability to pay, sometimes simply on the bald assertion that the municipality could always raise taxes.

The Michigan Municipal League has worked for months trying to get a compromise falling far short of complete repeal of the act and yet get greater consideration for the taxpayers' perspective. That faces as much opposition and political backlash as complete repeal, so I simply favor repeal.

There should be checks and balances in every governmental action. PA 312 takes away the taxpayers’ perspective. We must push for every cost control in government that we can, in light of the scarce dollars we have to spend. Increasing taxes to pay for exorbitant wages and benefits for even our most valued public employees in the face of an economic downturn is not only politically unpalatable, but also counterproductive in encouraging job growth in Michigan.

Comments?