Public Act 312

woodwardboy · November-19-10, 09:08 AM

Will the first challenge to Public Act 312 be Hamtramck? All municipal pensions, salaries, and benefits are protected by Public Act 312.
Please share your thoughts on the pros and cons of Public Act 312.

EastSider · November-19-10, 09:58 AM

Just to clarify first, PA 312 doesn't "protect...All municipal pensions, salaries, and benefits" as you claim; it makes arbitration compulsory for municipal police and fire departments [[including EMS and emergency dispatchers).

I think the act needs significant revision, specifically to require the arbitrator to consider the community's overall budget and whether the contract proposal is affordable.

**Novine** · November-19-10, 10:23 AM

State and local pensions are protected by the state constitution.

"In Michigan, state and local government pension plan benefits are protected by Article IX, Section 24 of the 1963 State Constitution..."

http://www.crcmich.org/PUBLICAT/2000s/2009/rpt356.html

**rondinjp** · November-19-10, 01:15 PM

Originally Posted by Novine

State and local pensions are protected by the state constitution.

"In Michigan, state and local government pension plan benefits are protected by Article IX, Section 24 of the 1963 State Constitution..."

http://www.crcmich.org/PUBLICAT/2000s/2009/rpt356.html

This is the same flawed argument being made public unions [[i.e. Ill. teachers union) in Illinois. However, our state constitution has nearly identical language as Ill and many people are looking at the actual wording and coming to a different conclusion.

Our constitution states:

The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby...

The actual language only protects what has been accrued. The constitution does not guarantee protection to pension systems that are inadequately funded. In other words, it does not guarantee that the state has to increase taxes to fund deficient pension systems. The constitution simply protects pension systems if the state tried to takeover and allocate the pension funds for some other purpose.

This is going to be a very ugly battle in the next several years as many public pension systems are woefully underfunded.

EastSider · November-19-10, 01:26 PM

Originally Posted by rondinjp

This is the same flawed argument being made public unions [[i.e. Ill. teachers union) in Illinois. However, our state constitution has nearly identical language as Ill and many people are looking at the actual wording and coming to a different conclusion.

Our constitution states:

The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby...

The actual language only protects what has been accrued. The constitution does not guarantee protection to pension systems that are inadequately funded. In other words, it does not guarantee that the state has to increase taxes to fund deficient pension systems. The constitution simply protects pension systems if the state tried to takeover and allocate the pension funds for some other purpose.

This is going to be a very ugly battle in the next several years as many public pension systems are woefully underfunded.

I don't have the time to search out the AG opinion right now, but there are some that speak to this exact issue, rondinjp. Your analysis isn't supported by them, if I remember rightly.

**kraig** · November-19-10, 01:29 PM

The City of Detroit and the Police Union have fought over Public Act 312. I think Detroit challenged the Act decades ago.

**rondinjp** · November-19-10, 01:51 PM

Originally Posted by EastSider

I don't have the time to search out the AG opinion right now, but there are some that speak to this exact issue, rondinjp. Your analysis isn't supported by them, if I remember rightly.

Maybe not according to an old AG opinion, but court's will begin to decide these constitution clauses within the next 1-2 years.

It will be really interesting to see how they decide. The AG opinion your speaking of is from the 1970's, I believe. Times are different now. The amounts under these public pensions that were guaranteed are no longer sustainable. A court reviewing these clauses will probably review and possibly interpret the law differently than the AG opinion. Plus, courts are not beholden to this opinion.

Like I said previously, many legal experts have weighed in on the Illinois const. b/c of how severely underfunded the public pensions are there. Their interpretations are that the actual words do not state or require back payments to underfunded pensions. Instead, "accrued benefits" cannot be diminished.

woodwardboy · November-19-10, 04:52 PM

Union contracts are specifically mentioned:
http://www.publicbroadcasting.net/mi...kruptcy.debate

**Novine** · November-19-10, 04:56 PM

"The actual language only protects what has been accrued. The constitution does not guarantee protection to pension systems that are inadequately funded."

The CRC article discusses this. The state doesn't have an obligation to fund local pensions but the local units of government are obligated to fund them. I don't think the courts are going to allow local units to escape their pension obligations by crying poverty when they are responsible for those pensions being underfunded.