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Binding arbitration reform will ensure communities can afford public safety agreements

Wednesday, July 20, 2011

Contact: Sara Wurfel
P: 517-335-6397 E: 

LANSING, Mich. - Gov. Rick Snyder today signed legislation that protects taxpayers and public safety professionals by making a community's ability to pay a top consideration in the public safety binding arbitration process. 

The legislation, which is a key part of the governor's community development and local government reform plan that he proposed in March, was developed in cooperation with lawmakers, local units of government and union officials. 

"We approached this issue with the common goal of finding ways to ensure public safety professionals and taxpayers are both treated fairly," Snyder said.  "And in the end, everyone who worked on this issue agreed that we need to give priority to a community's ability to pay so we can avoid drastic cuts that would lead to layoffs and undermine their ability to protect residents."

Michigan has relied on binding arbitration as a way of resolving public safety labor disputes for decades.  But under current law, a local unit of government's ability to pay does not need to be taken into account, sometimes resulting in unaffordable agreements that give local units of government no choice but to make cuts.  With this reform, arbitration panels will have to give priority to a community's finances when determining labor agreements.

The legislation also shortens the binding arbitration timeline, preventing it from stretching out over the course of several years.  To help speed up the process, both sides must submit their final best offer to an arbitration panel before the beginning of the arbitration process.

"This reform will ensure arbitration agreements are resolved in a timely manner by ensuring both sides are working to find a realistic agreement," Snyder said. 

With this reform, both sides will have to share equally in the cost of arbitration, giving all involved an incentive to work together to find a mutually acceptable agreement before getting to the point of needing binding arbitration. 

Mark Docherty, president of the Michigan Professional Fire Fighters Union, voiced his support.

"This reform helps strike the right balance that allows us to properly focus on our public safety responsibilities while helping ensure potential labor disputes can be settled through a fair, equitable and timely binding arbitration process," Docherty said.  "We hope to continue working together with the governor and Legislature to make improvements in this process as well as other reforms."

State Rep. Jeff Farrington, who sponsored the legislation, hailed the reform that he said is long overdue.

"After 30 years of attempting reform I'm excited that unions, municipalities, Republicans and Democrats could come together to save taxpayer dollars while ensuring a balanced arbitration process for our public safety professionals," Farrington said. 

H.B. 4522 is now P.A. 116 of 2011.