Move to repeal EFM law may go to voters in Nov.

Michigan voters could be faced with a ballot question in November asking whether a controversial state law granting expanded powers to emergency financial managers (EFM) should be repealed, following the submission of more than an estimated 226,000 signatures to the Michigan Secretary of State’s Office on Wednesday, Feb. 29.

Opponents of Public Act (PA) 4 of 2011, the Stand Up for Democracy Coalition, filed 226,637 signatures that will be vetted based on a random sampling process by Bureau of Elections staff in the coming days, according to Fred Woodhams, spokesman for Michigan Secretary of State Ruth Johnson.

Staff members will be determining whether the signators are registered voters and whether they are registered at the address they put down on the petition circulated in recent weeks and months, Woodhams said.

Within 60 days, the state Board of Canvassers has to vote on whether enough valid signatures were filed to cross the threshold of 161,305 signatures that are needed to get the referendum on the November general election ballot. If so, that could throw the current emergency financial manager system for a loop.

“If the Board of State Canvassers puts this referendum on the ballot, then the law would be suspended,” Woodhams said. “What that will mean in practice is really a matter for the Department of Treasury.”

Terry Stanton, director of communications for the Michigan Department of Treasury, said the administration’s position is that if there are enough valid signatures to put the measure on the ballot, the provisions adopted by the state Legislature in March 2011 would be suspended, not the entire state law, which would be replaced with its original version, PA 72 of 1990, which existing emergency financial managers — like the ones in Pontiac and Benton Harbor, for example — would have to abide by until a decision by voters is made.

If approved to go on the ballot, the actual ballot language would also have to be approved by the state Board of Canvassers.

The petition circulated throughout Michigan read as follows:

“A petition for a referendum election to repeal Public Act 4 of 2011, which allows the governor to declare a local government or school district in receivership and appoint an emergency manager to take control with the following powers, among others: to assume the powers of local elected officials; to take control of revenue and spending; to terminate, modify and renegotiate contracts; to refuse to bargain with the employee representatives; to take control of employee pension funds under certain circumstances; and with the governor’s approval, to sell public assets or dissolve a city, township or county. This referendum proposal is to be voted on at the General Election, November 6, 2012.”

Effectively, PA 4 of 2011, also known as the Local Government and School District Fiscal Accountability Act, institutes a 12-step process by which a state-appointed official intervenes in the fiscal well-being of a community or school district and comes up with a written plan to address underlying causes of what the state considers a financial emergency.

After several steps, if there is confirmation that a financial emergency exists, the governor is required to declare a local government in receivership and appoint an emergency financial manager, who serves at the pleasure of the state’s chief executive.

Upon being placed in receivership, the chief executive officer and governing body of a local government in receivership are prohibited from exercising any powers of their offices without written approval of the emergency financial manager.

Their compensation and benefits are also eliminated.

Within 45 days of being appointed, the EFM is required to develop a written financial and operating plan. A local unit of government is removed from receivership when the financial conditions on which the underlying financial emergency was founded are corrected in a sustainable fashion as determined by the state treasurer.