State bans stir critics to ask: Does Lansing know best?

Jonathan Oosting
Detroit News Lansing Bureau

Lansing — Michigan’s Republican-led Legislature is working to ban local governments from doing things none has tried: from taxing soda-pop to prohibiting job interview questions.

The recent rash of pre-emption bills — backed by powerful business and industry groups — will prevent municipalities from mimicking what GOP legislators consider faddish rules from liberal enclaves, such as San Francisco or Seattle, they argue could slow Michigan’s economic rebound.

But critics contend the bills are part of a continued assault on local control out of Lansing, a chisel compared to the hammer of state-appointed emergency managers who took over struggling cities with failing finances in the recent past.

The Legislature last year banned plastic bag fees, thwarting environmentally driven plans in Washtenaw County, and is considering bills to prohibit local zoning restrictions on Airbnb or other short-term rental homes.

“I hear legislators complaining all the time about the federal government telling the state what to do,” said Spring Lake Township Supervisor John Nash, who is fighting the Airbnb bill. “Shut up! That’s what you’re doing to me.”

The recent pre-emption proposals build on a 2015 law critics dubbed the “death star” bill because it zapped local governments’ ability to enact labor rules few had considered, including minimum wages or paid sick leave requirements for employers.

A patchwork of local rules could create a compliance “nightmare” for small businesses already working under state and federal regulations, said Charlie Owens, state director of the National Federation of Independent Businesses.

“With these local governments, you think you’ve sent them a message that labor laws are the purview of state and federal government, and they just seem to come up with new ways to interfere with employer-employee relationships,” Owens said.

The new bills would limit local governmental authority, but that’s nothing new, said Chris Hackbarth, director of state and federal affairs for the Michigan Municipal League, which advocates for local governments.

“A lot of the conversations we’ve been having are about issues that aren’t in Michigan or haven’t come up in Michigan, so it’s kind of a shadow boxing that takes place,” Hackbarth said.

“Even if that was the case, local control is about what each community is looking to provide based on resident feedback. If residents didn’t want it, you wouldn’t see it happening.”

The Michigan Legislature this past week sent Gov. Rick Snyder a bill to prohibit local government from taxing food, drinks or chewing gum.

While no communities have pursued such taxes here and the state constitution usually prohibits local sales taxes, proponents called it a pre-emptive strike against soda-pop taxes like those in Seattle, Philadelphia and San Francisco.

Chicago-area Cook County this week repealed its short-lived pop tax amid furor. Critics disputed the stated health motivations of pop tax advocates such as former New York Mayor Michael Bloomberg, who has spent millions of dollars to promote and defend the Illinois measure.

“They knew how terrible it was for business,” said Sen. Pete MacGregor, R-Rockford, who sponsored one of the Michigan bills. “It was portrayed as a health fix, but if we’re going to change people’s behavior, there’s other ways to do it, not penalizing people.”

MacGregor called it a sales tax issue, not a local control issue, telling reporters the Legislative Services Bureau had identified potential “loopholes” in the state constitution that could have opened the door to local excise taxes.

Bipartisan efforts

While Democrats have railed against attacks on local control in recent years, most minority party legislators joined Republicans in voting to ban local pop taxes. Senate Minority Leader Jim Ananich, D-Flint, was a co-sponsor.

“I’m not a big believer that Lansing knows best; I just have a philosophical issue with sin taxes,” Ananich said. “We have to deal with these issues when it comes to obesity, but I think there’s a better way to do it.”

But the pop tax threat was a “phantom problem,” said Rep. Jeremy Moss, D-Southfield, a former city council member and one of seven House members to vote against the proposal. He argued that no local officials had been digging to find the purported “loophole” the bill closed.

“This isn’t how government should work in Michigan,” Moss said. “If there’s a policy we don’t like at the local level, there are avenues where citizens at the local level can protest against them. It just seems like we’ve become this big state government that comes in and tells the locals how to run their communities.”

The Michigan Senate last week approved a separate pre-emption bill that would prevent local rules to ban employers from asking a prospective employee’s wage history during a job interview.

Some cities, such as San Francisco and Philadelphia, have enacted such bans. Advocates say wage history interview questions can perpetuate pay gaps for women who earned less than men in previous jobs.

Sponsoring Sen. John Proos, R-St. Joseph, said his bill has nothing to do with the gender wage gap issue or local control. He pointed to state and federal equal opportunity employment laws that already govern the hiring and firing process, calling them “robust.”

“Individual municipalities establishing an additional regulatory structure only costs business and industry in the long run, which means they hire less people,” Proos said.

Longtime control fights

Local control debates are nothing new in Lansing, where governors in the 1990s signed bills banning local gun restrictions and prohibiting Detroit from requiring police officers to live within city limits.

The gun debate continues to rage after recent court rulings that upheld restrictions enacted by school districts in Ann Arbor and Clio. Republicans in the Michigan House recently approved a “super pre-emption” law that would make it easier for residents to take legal action against local units of government that enact gun control ordinances that conflict with state law.

Statewide, 70 percent of local government officials say the state is taking away too much of their local decision-making authority, according to a recent survey conducted by University of Michigan researchers.

But those views differ by issue. A plurality of local officials told researchers the state should have primary authority when it comes to anti-discrimination policies, social issues, such as gun regulations, and business regulations, such as the minimum wage, plastic bag bans and Airbnb.

By contrast, most local officials said local governments should be in charge of land use and zoning, local finance and tax policy, and general economic development issues.

While local governance “has its place,” officials are too often using local control “as an excuse to grow their own bureaucracy” and generate revenue, said Owens of the National Federation of Independent Businesses. The Cook County pop tax was reportedly expected to generate $200 million next year.

“If you look at a lot of the local governments trying to do this, it’s very clear they haven’t solved all of their own local problems with regards to the basic services that citizens come to expect,” he said. “We suggest part of the reason they’re struggling with their budget is perhaps because they’re doing things they shouldn’t be doing.”

But Michigan is already “probably one of the most restrictive states in the country” when it comes to funding local governments, Hackbarth said. His organization contends the state has not held up its end of the revenue-sharing bargain that prevents local sales taxes.

Moss downplayed fears expressed during the soda-pop tax debate that Michigan communities will try to find “creative loopholes” to remedy budget shortfalls.

“Let’s give them an uncreative solution and actually restore revenue sharing in Michigan,” said Moss, arguing the Legislature is stripping control from communities it has not properly funded.

“The contradictions in Lansing could make your head spin,” Moss said.