Testimony - Steve Delie, Mackinac Center for Public Policy, House Bill 5623

Summary

Testimony of Steve Delie, director of labor policy at the Mackinac Center for Public Policy, in opposition to House Bill 5623. The testimony states that the bill would expand the groups covered by Act 312 of 1969 to include correctional officers, and contrasts the Act 312 arbitration process with the fact-finding process under the Public Employment Relations Act. It says Michigan's municipalities had unfunded pension liability totaling $8.3 billion as of last year and that the bill would leave counties at the whims of unelected and unaccountable arbitrators. It urges placing police and fire units into the existing PERA framework rather than adding corrections officers to Act 312.

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Good afternoon. My name is Steve Delie, and I am the director of labor policy at the Mackinac Center for
Public Policy. We are a 501(c)(3) nonprofit research and educational institute that advances the principles
of free markets and limited government. Through our programs, we challenge government overreach and
advance free-market approaches to public policy that free people to realize their potential and dreams.

I am here today to oppose House Bill 5623.

Amending Act 312 of 1969 to encompass correctional officers is a simple amendment with a complex
result. Act 312 is one of the two major statutes governing public sector collective bargaining in Michigan,
with the other being the Public Employment Relations Act. Currently, police, fire, and emergency services
personnel are covered by Act 312; all other public employees are governed by PERA. House Bill 5623
would expand the groups covered by Act 312 to include correctional officers.

There is an important difference in the collective bargaining process for bargaining units governed by Act
312 and those covered by PERA. Under PERA, if a union and employer cannot reach an agreement
following mediation, the parties then submit to a fact-finding by the Michigan Employment Relations
Commission. That fact-finding is nonbinding, but public. If the parties cannot agree after the MERC fact-
finding decision, the parties must attempt to negotiate an agreement at least one final time. If agreement
cannot be reached at this final meeting, the public employer may then implement their contract proposal.

Act 312 uses a different process. Under Act 312, if mediation fails, both parties then submit their dispute
to an arbitrator. The arbitrators review the parties’ positions and choose one of those positions to be
implemented. As an example: if a county and labor organization are negotiating over employer
contributions to retiree healthcare, the arbitrator would decide the matter by choosing between the
parties’ position. The arbitrator’s decision is binding on both parties and is retroactive to the date the
dispute arose.

Such a system is a significant challenge for municipalities. As of last year, Michigan’s municipalities had
unfunded pension liability totaling $8.3 billion dollars. These municipalities, already facing a debt crisis,
must now adapt to a post-COVID economy. Should HB 5623 pass, however, Michigan’s counties will be at
the whims of unelected and unaccountable arbitrators when attempting to institute needed financial
reforms. That is a cost local municipalities may not be able to bear.

There is no question that the work of our county corrections officers is important, as is the work of our
emergency services personnel. These brave men and women put their safety and lives on the line to
protect the public safety. But the public welfare is not limited to safety. It encompasses the financial health
of our communities as well. Placing corrections officers into an already problematic system does not help
the people of Michigan; instead, we should be placing police and fire units into the existing PERA
framework.

Under the current system, counties who use PERA to implement regulations that treat corrections officers
unfairly are accountable to the public. Citizens, unhappy with unfair treatment of public employees, may
vote for different county commissioners and demand reform. Should HB 5623 pass, however, county
commissioners may find their hands tied, unable to implement reforms even if those reforms would be in
the public’s best interest.
In conclusion, the effects of HB 5623 would be severely detrimental to Michigan’s counties, and the
public at large. We should work to find other ways to improve conditions for corrections officers and to
develop solutions that do not further remove local control from voters. Thank you.


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