50 ideas to fix Michigan

Outlaw binding police, fire arbitration

The Detroit News is highlighting ideas from various groups to promote discussion on reform and restructuring government and the economy. Outlaw binding police, fire arbitration

Idea 2: Eliminate binding arbitration for municipal police and fire workers.

Why: Public Act is four decades old and prevents police and firefighters from going on strike by mandating that labor disputes be settled by third party, binding arbitration. Arbitrators do not take into consideration the financial status of local governmental units or their ability to pay the awards mandated by the arbitrators. Public safety costs amount to as much as half of an average city budget. Current law prevents money-saving consolidation of police and fire departments and can drive pension benefits to the point where, in some cases, retirement incomes are greater than wages when officers are still on the job.

Benefit: Economic studies estimate that removing binding arbitration could result in a 3 percent to 5 percent reduction in local government expenditures. Local governments in Michigan spent $2 billion on public safety in 2006. A 4 percent reduction would amount to annual savings of $80 million statewide. Not only would repealing Public Act 312 directly reduce costs to municipalities and help them manage their budgets, it would also provide flexibility to achieve efficient and cost-effective consolidation and collaboration among Michigan's 1,800 units of local government.

How: The state Legislature would have to repeal Public Act 312.

Obstacle: Public safety unions (such as the Michigan Association of Police, Michigan Professional Fire Fighters Union and Police Officers Association of Michigan) argue PA 312 does exactly what it was intended to do and this is prevent strikes. They also contend repealing PA 312 is an attempt to solve a problem affecting a small amount of municipalities with a statewide solution.

Sources: Business Leaders for Michigan and Center for Michigan.