Michigan Proposal 1, State Authority to Appoint Emergency Managers and Address Local Government Financial Emergencies Referendum (2012)

Michigan Proposal 1
Election date November 6, 2012
Topic Local government finance and taxes and Local government organization
Status Defeated
Type Veto referendum	Origin Citizens

Michigan Proposal 1 was on the ballot as a veto referendum in Michigan on November 6, 2012. It was defeated.

A “yes” vote supported establishing provisions relating to the appointment of an emergency manager upon the finding of a fiscal emergency.

A “no” vote opposed establishing provisions relating to the appointment of an emergency manager upon the finding of a fiscal emergency.

Aftermath

Lawsuit

Following the defeat of Proposal 1 during the 2012 general election, it is unknown what will become of the emergency managers already appointed by the governor. Robert Davis, an opponent of the law, believes that all existing managers should be removed from their positions, and has filed a lawsuit pushing the courts for an answer. The Michigan Court of Appeals quickly reviewed the case and determined that the managers will stay in place under Public Act 72, the predecessor to PA 4. However, the case now goes to the Michigan Supreme Court and is set to be heard on December 5. Though Michigan Attorney General Bill Schuette believes that the citizens essentially repealed PA 4's repeal of PA 72, thereby restoring the original law, early signs indicate that the supreme court may not agree. During a lawsuit over the referendum's placement on the ballot, Chief Justice Robert Young, Jr. said, "Whenever a statute, or any part thereof shall be repealed by a subsequent statute, such statute, or any part thereof, so repealed, shall not be revived by the repeal of such subsequent repealing statute."

Supporters' response, new bill

Following the measure's defeat, Governor Rick Snyder and state lawmakers quickly began the process finding a replacement for the law. On December 13, 2012, the Michigan legislature approved a new version of the bill which was then signed by Gov. Snyder on December 27. The new bill offers financially troubled local governments the ability to choose from four options: accept an emergency manager, undergo bankruptcy, enter into a mediation process, or join the state in a partnership called a consent agreement. Choosing one of these options is mandatory, however, and governments that qualify are not allowed to opt out of the program. Opponents of the new bill said that no matter what option is chosen, the result would be state-oversight. Though such oversight is essentially what voters rejected during the 2012 general election, the new bill is not subject to referendum because it contains appropriations in the form of providing for emergency managers' salaries.

The new emergency manager bill took effect on March 28, 2013. The appointment of Kevyn Orr, a bankruptcy lawyer, a Detroit's financial manager was met with not only mass public protests, but also the filing of a federal lawsuit challenging the constitutionality of the new law. Concerns have also been raised over a possible conflict of interest involving Orr's former employer Jones Day. Detroit Mayor Dave Bing wants to hire the firm as the city's legal counsel, a decision that may actually fall upon Orr to make. According to reports, lawyers representing the American Federation of State, County, and Municipal Employees have filed subpoenas to officials involved in Orr's hiring.

Election results

Michigan Proposal 1
Result		Votes	Percentage
Yes		2,130,354	47.33%
No		2,370,601	52.67%

Results are officially certified.

Source

Text of measure

Ballot title

The ballot title for Proposal 1 was as follows:

“

PROPOSAL 12-1 A REFERENDUM ON PUBLIC ACT 4 OF 2011 – THE EMERGENCY MANAGER LAW Public Act 4 of 2011 would: Establish criteria to assess the financial condition of local government units, including school districts. Authorize Governor to appoint an emergency manager (EM) upon state finding of a financial emergency, and allow the EM to act in place of local government officials. Require EM to develop financial and operating plans, which may include modification or termination of contracts, reorganization of government, and determination of expenditures, services, and use of assets until the emergency is resolved. Alternatively, authorize state-appointed review team to enter into a local government approved consent decree. Should this law be approved? YES NO

”

Support for Public Act 4

Supporters of PA 4 argued that the act was important to ensuring that local governments were financially stable.

• The group Citizens for Fiscal Responsibility opposed the referendum and successfully brought a challenge to the petitions submitted by opponents. The challenge was brought on the grounds that the petitions' font size was too small.

• Governor Rick Snyder supported the law, saying, "Public Act 4 helps financially struggling cities and school districts to get back on track,” Snyder said. “If the emergency manager law were to go away, debt in those local units of government would continue to pile up, bills would go unpaid, paychecks may not be sent, lights could be turned off, police and fire protection might not be provided, and students would be at risk of not having a school to attend. Michigan needs this law because it helps those communities to efficiently and effectively overcome financial problems and avoid painful long-term solutions, and that is good for all Michiganders."

Campaign contributions

In Michigan campaign finance information related to ballot measures is organized by ballot question committees. The following data was obtained from the state Campaign Finance Committee:

Committee info:

Committee	Amount raised	Amount spent
Citizens for Fiscal Responsibility	$25,000.00	$24,481.75
Total	$25,000.00	$24,481.75

Opposition to Public Act 4

Stand Up for Democracy Campaign is a coalition that sought to place the referendum on the ballot.

Michigan Forward also supported placing PA 4 on the ballot. According to their website:

Public Act 4 of 2011, "The Local Government and School District Fiscal Accountability Act" has created elite bureaucrats with absolute power by expanding the role and power of Michigan’s emergency financial managers. This legislation supersedes the previous emergency financial manager policy and court decisions that provide accountability and support democracy. Many municipalities and school districts in Michigan’s urban areas are threatened by the extremes this policy takes in the sign of financial distress.

• On September 12, 2011, the Flint City Council passed a resolution in support of placing the proposed referendum. The resolution, according to reports, does not explicitly take a position on the issue but several city council members spoke out against the state law. Councilman Scott Kincaid said, "None of us like it, including myself. What we really need to do now is support the referendum."

• Rep. Woodrow Stanley argued that any attempt to create a temporary emergency manager law would undermine the will of the people and infringe on the democratic process of voters electing their government leaders.

Campaign contributions

In Michigan campaign finance information related to ballot measures is organized by ballot question committees. The following data was obtained from the state Campaign Finance Committee:

Committee info:

Committee	Amount raised	Amount spent
Stand Up for Democracy	$183,860.92	$182,965.07
Total	$183,860.92	$182,965.07

Poll

See also: Polls, 2012 ballot measures

• An EPIC-MRA poll conducted on July 9-11, 2011, found that 53 percent were in support of the referendum and opposed the state law, while 34 percent were opposed to the referendum and in support of the state law. The poll was based on a pool of 600 likely voters.
• An EPIC-MRA poll conducted on September 8-11, 2012, found that 46 percent were in support of the measure and opposed the state law, while 42 percent were opposed and in support of the state law, and another 12% were undecided. The survey was based on a pool of 600 likely voters and has a margin of error of plus or minus 4 percent.

Legend      Position is ahead and at or over 50%     Position is ahead or tied, but under 50%

Date of Poll	Pollster	In favor	Opposed	Undecided	Number polled
July 9-11, 2011	EPIC-MRA	34%	53%	13%	600
September 8-11, 2012	EPIC-MRA	42%	46%	12%	600

Note: A "yes vote" implements PA 4, while a "no vote" rejects PA 4.

Path to the ballot

See also: Signature requirements for ballot measures in Michigan

A veto referendum is a citizen-initiated ballot measure that asks voters whether to uphold or repeal an enacted law. This type of ballot measure is also called statute referendum, popular referendum, people's veto, or citizen's veto. There are 23 states that allow citizens to initiate veto referendums.

In Michigan, the number of signatures required for a veto referendum is equal to 5% of the votes cast in the last gubernatorial election. Signatures for veto referendums are due 90 days following the final adjournment of the legislative session at which the targeted bill was passed. A simple majority vote is required for voter approval.

Stand Up for Democracy Campaign was the coalition leading the petition circulation efforts. According to reports, the group planned to complete their signature gathering process by September 2011.

• As of August 2011 an estimated 80,000 petitions were in circulation.
• On August 16 supporters announced 120,000 signatures had been collected.
• In early November 2011, supporters announced 130,000 signatures had been verified.

• On February 29, 2012, members of the group Stand Up for Democracy delivered around 226,000 signatures to the state capitol. The Michigan Secretary of State has 60 days to verify that enough signatures are valid to place the referendum on this year's ballot.

• On April 26, 2012, the State Board of Canvassers voted 2-2 on the referendum, thereby preventing it from appearing on this fall's ballot.

See also

2012 Measures

• 2012 Measures
• Local government finance and taxes on the ballot
• Local government organization on the ballot
• State executive powers and duties on the ballot
• 2012 legislative sessions

Michigan

• Michigan ballot measures
• Michigan ballot measure laws

News and analysis

• Ballot measure lawsuits
• Ballot measure readability
• Ballot measure polls

External links

• Michigan Bureau of Elections, "Initiatives and Referendums Under the Constitution of the State of Michigan of 1963," January 2019
• "PROPOSAL 12-1 A REFERENDUM ON PUBLIC ACT 4 OF 2011 – THE EMERGENCY MANAGER LAW"