If Michigan wants to recover from its economic doldrums, it would help if local governments could get their finances back in balance. And if local governments are going to balance their books, it would help if they could get some relief from labor laws that empower unions at the expense of taxpayers.

Repealing Public Act 312, which provides for binding arbitration of labor disputes between local governments and unions representing police and firefighters, would be a good first step. A task force convened by Gov. Jennifer Granholm herself estimates that binding arbitration adds as much as five percent to the cost of government.

Local governments are starting to call for relief from PA 312. Last month, the Shelby Township Board of Trustees unanimously passed a resolution urging the Legislature to repeal binding arbitration. (The text of their resolution is here.) Officials in Harrison and Washington townships have passed similar resolutions.

So far, reform proposals that have been made in Lansing have failed to address the main problem with arbitration — the subjectivity of the process and the reliance on a single arbitrator who is unaccountable for the consequences of the decision he or she makes. The best approach for the Legislature is the simplest: Repeal PA 312 and let local governments implement their last best offers.

These calls for repeal are coming from elected local officials who are on the front lines of municipal finance and presumably know what their budgets look like, because they're the ones who have to make them balance. It’s no longer a question of the political class listening to the people. The question now is: Can the political class even hear itself think?

Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.