LANSING – The state will soon have a new law to address financially troubled local governments and school districts with the Senate on Thursday giving final approval to what amounts to a “replacement emergency manager law” after voters repealed PA 4 of 2011 in November.

The Senate passed SB 865 on a largely party-line vote, 23-15, with three Republicans – Sen. Bruce Caswell of Hillsdale, Sen. Tonya Schuitmaker of Lawton and Sen. Mike Kowall of White Lake – voting with Democrats in opposition.

The bill would give communities in a financial emergency the option of having a state-appointed emergency manager, a path to Chapter 9 bankruptcy, mediation or a consent agreement. With Detroit city government sinking ever further into financial trouble and the consent agreement widely considered a failure, the new law could greatly increase the possibility of the city going into bankruptcy.

Republicans have praised the legislation as giving options to those in financially struggling communities and including a local opinion on the matter – a conclusion they reached after voters rejected the law.

“What we’re doing with SB 865 is providing alternatives. We can listen to the voters just as well as anybody else. What we’ve done with this bill is include some options,” said Sen. Phil Pavlov (R-St. Clair), sponsor of the bill. “It will be the newly elected local official that will have that opportunity to take their economic destiny in their own hands.”

Caswell, one of the three Republicans who voted against the bill, said he was doing so because of what the citizens in his district had said in voting to repeal the previous emergency manager law.

“I’m following the dictates of the citizens back in my district who voted against the EM bill,” he said on the Senate floor.

Senate Democrats remained vehemently opposed to the bill, astounded, they said, that the GOP had not listened to voters and included an appropriation in the bill, making it ineligible to be subjected to a referendum.

Sen. Bert Johnson (D-Highland Park) proposed a substitute (ultimately defeated) that would have required the state to partner with financially distressed communities and limited any possible consent agreement to two years.

“We do not need a dictator from Lansing,” Johnson said. “To those that say this bill allows local input, I would say that is an affront. Cities have the right to govern themselves. When they need help, we should work in partnership.”

“The will of the people is the only legitimate foundation of any government and to protect its free expression should be our first object,” said Sen. Coleman Young II (D-Detroit). “Either you believe in democracy or not. Either you believe that 52 percent of this state, of the voters in Michigan voted this down or they didn’t. This is a complete and utter sellout of the voters of Michigan.”

Sen. John Gleason (D-Flushing) suggested there be a workgroup of people impacted by the emergency manger law and said the way the Capitol seems to be ignoring the voices of the people is “discouraging.” He said subverting the legislative process was a bad idea and what the Legislature was trying to do with the emergency manager law was just so as well.

Sen. Morris Hood III (D-Detroit) said he too was amazed at the Republicans’ actions and explained to the chamber why Democrats, especially those from cities with emergency managers of some sort, were especially emotional after Pavlov described Democrats as emotional.

“This body is doing things that I just really can’t conceive. And I try to look at things from all different angles and I just can’t figure out how, if you want to help somebody out, you don’t ask them,” he said. “I don’t see a lot of input to the other cities. Yes we’re emotional, because it’s our cities that are being affected by this law and we’re not even being brought into the law. Yeah, we get emotional. When somebody disrespects you, you get emotional about it.”

Sen. Virgil Smith (D-Detroit) said he was tired of “the pretentious attack against our rights, especially in the city of Detroit. You guys act like this is some type of panacea, like it’s going to get things in order,” he said, challenging the GOP to prove how their emergency managers have been effective.

Sen. John Proos (R-St. Joseph) responded that in southwest Michigan, 62 percent of Berrien County voted to support PA 4 (HB 4214 ), as well as 53 percent of Cass County. Van Buren County (mostly represented by Mr. Proos) had narrowly defeated it, he said.

“When you work cooperatively with the state to do so, it does work and this bill allows for that,” Proos said.

Sen. John Pappageorge (R-Troy) also rose in support of the bill, pointing to the availability of choice in this bill that did not exist in the previous and dismissing Senate Democrats’ allegations that this was still forcing communities into something they don’t want.

“The way I read this bill it says local governments have a choice. They can ask for an emergency manager, they can choose to go into bankruptcy, they can choose mediation and they can choose a consent agreement. If the options are up to the locals, what is the problem here?” Pappageorge said. “Just because the EM law was defeated does not mean the problem went away. It is still there. We have an obligation to try to do something about that problem.”

But the statements infuriated Democrats, and Smith, in particular, was livid.

“I respect where you’re coming from but the problem is they have not tried to work with us. They dictate to us. They come in and tell us what they want us to do,” Smith said. “This is control, what you got. I’m tired of this. You want to work in unison, then come holler at me. But you don’t want to come talk to me – you want to dictate and I’m tired of it!”

The bill now heads to Governor Rick Snyder.

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