Judge Rhodes Takes The State of Michigan to the Woodshed Over EM Law

[ndavies]

I think the political process is at work here. If the new EM law is hateful, put another referendum together, or - better yet - do that and throw out the legislators who ignored the will of the people, if that's what you believe happened.

The new EM law is referendum proof. One of the changes was adding an appropriation for the emergency managers salary to it. The appropriation prevents citizens from petitioning to have it overturned.

Also just because citizens don't want the law, doesn't mean the law isn't needed for the functioning of the state. At the end of the day, We still need a mechanism to deal with municipal entities that continually overspend their budgets.

[Hermod]

Do those states have examples of municipalities that have successfully filed bankrupt? California, for instance, has had several instances of cities and counties file bankrupt but I don't think there is any sort of process for state intervention of financially distressed local governments. California also appears to allow more autonomy at the local level for finding sources of revenue than does Michigan.

Not necessarily. Alabama took over a city because of embedded criminality among the elected political officials.

http://maxshores.com/up-from-the-ash...f-phenix-city/

Maybe Michigan should have done that when Kwame was in charge.

[MikeyinBrooklyn]

Completely agreed, ndavies. Public opinion should be a factor in making decisions, passing laws, etc. But it should be noted that public opinions constantly change, and you can't constantly change every public policy.

[Eber Brock Ward]

State sovereignty has always been the limiting factor to the Contracts Clause. The State can, within reason, adjust its own obligations, subject to Michigan's Constitution. The scope of the State's rights would likely be resolved by the state Supreme Court.

If the issue came before the judge [[which, again, I don't think either side really wants to have this fight), I would imagine that Chapter 9 allows for the readjustment of pension obligations, just like any other obligation. In my mind, it's a state law conflict in hiding--one state law [[Sec 24) does not allow for the adjustment of pensions, while another [[permitting the filing of Chp 9) doesn't rule it out. You could reconcile those by saying that, in Michigan, a municipality can file for Chapter 9, but not adjust pensions. That is, in the end, what the pensioners will argue [[if it ever gets there).

I think "thereby" refers to "state and its political subdivisions," but I guess the question is "which one?"

I guess the pensioners will affirmatively name the state in a suit after they get a plan they don't like. Suing the state in state court for a determination of the meaning of the state constitution might yield a result that the pensioners don't want, though.

And therein lies the rub, IMO. Were one to look at it like a game tree, the greatest expected value for the pensioners likely lies in acceding. Unfortunately, we cannot count on them or the current workers to be rational actors, as they act through their proxies. For that reason, I think a not unlikely outcome is that they get hoist on their own petard.

[BankruptcyGuy]

And therein lies the rub, IMO. Were one to look at it like a game tree, the greatest expected value for the pensioners likely lies in acceding. Unfortunately, we cannot count on them or the current workers to be rational actors, as they act through their proxies. For that reason, I think a not unlikely outcome is that they get hoist on their own petard.

I think that's why the pensioners sought their own representation, apart from the unions. The national offices of the unions have a big incentive to fight and win, lest other states try this. The local pensioners? Not so much. Negotiate the best deal you can, and take it.

[Wesley Mouch]

The new EM law is referendum proof. One of the changes was adding an appropriation for the emergency managers salary to it. The appropriation prevents citizens from petitioning to have it overturned.

Also just because citizens don't want the law, doesn't mean the law isn't needed for the functioning of the state. At the end of the day, We still need a mechanism to deal with municipal entities that continually overspend their budgets.

Why would you assume citizens don't want the EM law/process? I've seen no evidence that the citizens of Detroit don't want the EM law/process. We know there is a vocal group opposed. Do they represent a majority? Or just a loud minority?

[Ray1936]

Sidebar. Retirees are presently receiving their healthcare options from the City of Detroit and BC/BS at this time. Those retirees 65 and over with Medicare have an option that doesn't exceed much beyond Medicare from a BC/BS Medicare Advantage plan. Those retirees either under 65 or over 65 without Medicare are offered a monthly stipend of $125 to obtain Obamacare, and are otherwise screwed. Remember, Police and Fire retirees never paid into social Security/Medicare, so many are not covered by medicare no matter what their age. Fortunately, after I retired, I worked as a hospital security director and got my 40 quarters in, so am covered.

But anyway, thank you Detroit, for providing some KY jel as it goes up. Others don't get the KY.