In 2009, Ann Arbor became the poster child for critics of Michigan's public safety binding arbitration law, as a labor settlement cost the city $1.5 million in retroactive pay raises. The judgment came as police and fire departments consumed 55 percent ofAnn Arbor's budget and the city stared down a $2.4 million deficit.
The case neatly encapsulated a conflict facing municipalities across Michigan: The cost of public safety colliding with long-term fiscal stability.
A political remedy was presented in 2011, when the Legislature revised Public Act 312, the law barring public safety strikes and mandating binding arbitration to resolve a labor dispute between unions and local municipalities. The key change makes a local government's ability to pay the primary consideration in an arbitrator's decision when a local government and public safety union are at odds.
Less noticed was the narrow passage last year of another measure -- PA 54 of 2011 -- that bars a public sector arbitration panel from imposing retroactive wage increases after expiration of a contract. Union advocates fought it as an affront to bargaining rights, losing that battle when Lt. Gov. Brian Calley cast a tie-breaking vote in the state Senate.
"It's been sort of the surprising star in terms of pushing along labor negotiations with our membership," said Samantha Harkins of the Michigan Municipal League. "Unions don't like PA 54."
Mark Docherty, president of the Michigan Professional Fire Fighters Union, said it unfairly penalizes members by freezing their wages for a year or more:
"That person can be stuck at that wage for a long time. It penalizes our members in a way it wasn't meant to do."
Harkins sees these measures through the prism of local governments struggling to get a handle on expenditures they can no longer afford. MML lobbied for years to change PA 312, put in place in 1969 as an alternative to strikes by public safety unions.
"I think this will help to give our managers more control. It's something our members really pushed for, being able to have more certainty in the arbitration process," she said.
Eric Lupher, director of local affairs at the nonpartisan Citizens Research Council of Michigan, isn't so sure.
"I don't think it will have a great effect," he said.
Lupher said the changes leave in place a system he sees as flawed in its blind reliance on binding arbitration. Lupher said it undercuts the motivation to reach a mutually beneficial collective agreement, "leading to the contentious nature of bargaining."
"They've kind of tinkered around the edges. Many cities continue to operate in the old industrial model of us versus them and then you come down to the line," he said.
Docherty said firefighters are giving back wages and even adding to their pension contributions in labor negotiations.
Earlier this year, Grand Rapids reached a deal with its firefighter union to cut total employee compensation by 8.2 percent. Among the concessions: a wage freeze, elimination of a daily food allowance and higher health insurance and pension contributions. It reduced pension benefits for those hired after January 2012.
The agreement spared jobs that would have otherwise been cut.
The Jackson Fire Department is a painful example of what happens when fiscal problems meet a failure to collaborate. In 2011, the fire department lost 18 of its 34 positions as the city struggled to balance its budget.
With any further layoffs, "There’s no sense in even having a fire department,” Fire Chief David Wooden said.
Even after the cuts, police and fire accounted for 66 percent of the city's general fund budget.
Ted Roelofs worked for the Grand Rapids Press for 30 years, where he covered everything from politics to social services to military affairs. He has earned numerous awards, including for work in Albania during the 1999 Kosovo refugee crisis.