Michigan House drops penalties for labor contracts

LANSING, Mich. (AP) -- The Republican-led Michigan House on Tuesday dropped plans to punish public universities, school districts and local governments that signed unusually long labor contracts before the state's right-to-work law took effect.

The decision by House Republicans was especially good news for the University of Michigan and Wayne State University, which were facing the possibility of a 15 percent cut in their state aid, or about $75 million total.

Both the GOP-controlled Senate and Republican Gov. Rick Snyder had been skeptical of reducing or limiting funding for public entities that in some cases signed employee contracts lasting eight or 10 years. Democrats had outright bashed the tactic.

Under Michigan's right-to-work law signed in December, unionized workers can no longer be forced to pay union dues or fees after the expiration of any collective bargaining agreement that was in place on March 28. Until then, some employers and unions negotiated contract extensions that critics said delayed the impact of right to work.

In response, House budget panels began passing spending bills that included funding penalties unless public employers won a minimum amount of savings. The full House, however, stripped the language on Tuesday — a day before budget votes are scheduled in the chamber.

"Despite all of the attention the issue received in the press, very few public bodies actually went through with rumored plans to sacrifice the taxpayers' well-being for the benefit of select special interest groups," House Appropriations Chairman Joe Havemen, R-Holland, said in a statement.

He said House Republicans accomplished their goal and decided the penalties were "largely unnecessary" despite the GOP questioning a deal approved by Wayne State, for example, that included a 2.5 percent annual faculty salary increase for eight years — half based on performance.

"As we studied the contracts that were extended, we discovered that nearly all of them were within the normal course of operations. Had there been widespread excess, we would be debating the budget differently today," said House Speaker Jase Bolger, R-Marshall, who argued the funding limitations were not about punishment but rather ensuring accountability for taxpayers.

Democrats said the move was overdue.

"It was unfortunate we wasted so much time within our committees dealing with that issue instead of really solving the long-term problem of how we fund higher education and make it affordable for our students," said Rep. Sam Singh, D-East Lansing. "Everything these institutions did was part of the law, within their constitutional rights as individual institutions to negotiate with their employee groups. (Republicans) really didn't have a leg to stand on."

The Mackinac Center for Public Policy, a free-market think tank in Midland, has estimated that at least 54 of Michigan's roughly 550 K-12 school districts signed labor contracts between December — when the right-to-work law won quick approval over the objections of thousands of protesters — and its March 28 effective date. Some districts agreed to long contracts while many others were the usual three-year deals.

One contract that irked the GOP was the Taylor School District's 4 ½-year agreement that had a separate clause extending for 10 years a requirement that employees pay dues or — if they do not want to be in the union — service fees. School officials defended it, saying the contract included a 10 percent pay cut in the first three years.

While Republicans said their oversight role persuaded many administrators to avoid new contracts, Democrats said the funding threats scared off public employers that could have won concessions from willing unions in recent months.

"We might have had more savings across the state," Singh said.

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Email David Eggert at deggert(at)ap.org and follow him at http://twitter.com/DavidEggert00