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    On Election Day, voters in Michigan successfully repealed Public Act 4 by voting "No" on Proposal 1. This caused confusion over whether or not this meant Public Act 72 (the original form of the Act) was also repealed. In the end however, it looks like the decision has been made that Public Act 72 has returned. Michigan's Attorney General Bill Schuette wrote an opinion saying that should Public Act 4 be repealed, Public Act 72 would take its place. However, this decision could be opened up to legal challenges. Both the Flint City Council and the Sugar Law Center in Detroit have issued lawsuits arguing that Public Act 4 and Public Act 72 were one in the same and thus both should be repealed.

    . According to Mlive, Governor Snyder expressed his disappointment with the vote and said that "the repeal may make it more difficult for managers to do their jobs effectively and delay efforts to return cities and schools to full local control". The manager of Detroit's schools, Roy Roberts, has even considered resigning because Public Act 72 does not give him the powers to control the school's and their finances the way Public Act 4 did. He says that it is now too difficult to properly do his job.

    Now that Public Act 4 has been repealed, Governor Snyder is moving forward and trying to find new ideas on how to deal with the financial problems that still exist in Michigan. One of these ideas is to create a hybrid version of the Emergency Financial Manager Law, which Snyder hopes addresses some of the concerns of the opposition that led to the repeal of Public Act 4 (according to Mlive). This new proposal does not strip the local governments of as much power as before, and instead hopes to make it so the manager and local government can, to a certain extent, work together to solve the financial problems. Governments would also have an opportunity to match whatever budget cuts a manager would propose before the manager is actually appointed. Cities could also choose to file for Chapter 9 municipal bankruptcy, something that Snyder previously opposed but now says he would consider.

    Part of the fallout from the repeal involves municipal credit in Michigan. According to Business Week, investors in Michigan's debt are suffering after the repeal, with "the yield penalty on debt of Michigan issuers reaching a five-week high...after voters killed Public Act 4 on Nov. 6" . There is concern that because of the repeal, cities will file for bankruptcy, which is not good for the municipal credit. Bart Mosley, the co-president of Trident Municipal Research, said that "Public Act 4 had proved to be one of the most effective pieces of legislation in the country for dealing with credit stress for local governments".

     

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    About Us

    The Michigan Policy Network is a student-led public education and research program to report and organize news and information about the political process surrounding Michigan state policy issues. It is run out of the Department of Political Science at Michigan State University, with participation by students from the College of Social Science, the College of Communication, and James Madison College. 

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    Meet your Policy Fellow: Michael Raley

    Michael Raley is a fourth year Sociology and Public Administration/Public Policy student at Michigan State University. He is especially interested in the public policy, politics, and sociology of urban space, as well as transportation systems and public transit. A native of the Grand Rapids area, Michael is currently an intern in the office of State Representative Roy Schmidt, who represents the west and northeast sides of the city. He also aspires to pursue a career in urban and regional planning, and hopes to attend graduate school for such a course of study.