Public Unions may Bankrupt 30 Michigan cities

A life and death  battle between public employee unions versus cities, states and our national economy is looming…. We have all heard of the battles between N.J. Gov. Christie and the large unions there. Now take a look at how small cities may declare backruptcy to survive deals given public employee unions years ago. This scene will be played out all over the country very soon. SHAW.

One need look no further than two Michigan officials — William Cooper, the city manager of Hamtramck, and Tom White, associate director for labor relations of the Michigan Association of School Boards — to grasp the seriousness of the financial crisis exploding across this country. Cooper told the New York Times that his city government “maybe” can pay its bills through March 1. Hamtramck has already cut what it could from its budget, reducing spending for parks, senior centers and road maintenance. Now city leaders say their only remaining option is to file a municipal bankruptcy. If Hamtramck is allowed to do that, according to the Times, at least another 30 Michigan cities will quickly follow suit, so state government leaders aren’t likely to permit such bankruptcy filings.

White says public school districts across Michigan face similar dilemmas. Their situation could be quickly and dramatically improved “with the stroke of a pen.” But that stroke likely won’t be taken for the state’s school districts for the same reason it won’t for Michigan’s desperate localities — public employee unions reflexively oppose cuts in their tax-funded compensation programs, including salaries, retirement and health benefits. White estimates that as much as $300 million could be saved merely by requiring public school employees to pay for 20 percent of their health benefits — they currently pay nothing. By contrast, private-sector employees with company health plans pay a nationwide average of 26 percent, according to the Kaiser Family Foundation. And Cooper says Hamtramck’s police and firefighter unions have steadfastly refused to renegotiate pay and benefits contracts that eat up 60 percent of the city’s annual budget. “They kind of have the Cadillac plan, and we’d kind of like the Chevy,” he told the Times.
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