News Story

Michigan school districts might face higher costs from union-friendly legislation

Proposal would require districts to pay increased costs even if there is no contract

If Democrats regain control of the Michigan Senate and House in today’s election and Gov. Gretchen Whitmer wins another term, one item on their agenda could raise costs for the state’s school districts.

Senate Bill 1094 would repeal a law, enacted in 2011, that protects local school districts from having to pay out large increases in salaries and benefits should a union contract expire without a replacement on hand. A House Fiscal Agency analysis of the 2011 law notes committee testimony from the superintendent of Royal Oak Schools, who stated the district had faced this situation. The district’s contract with the union had expired, and there was no new agreement. District officials had to pay two years’s worth of pay raises and increased benefits during the negotiating time.

The Michigan Employment Relations Commission told the district it had to pay $777,000 in salary step increases and $955,000 in additional health care costs, even though it was not under a new contract. In situations like this, union officials do not have an incentive to come to a new agreement, because their teachers receive pay increases and have additional health care costs covered, even without a contract.

“For years, Michigan school districts were in constant fiscal strife because unions would lock in raises and then refuse to negotiate in good faith,” Jarret Skorup, director of marketing and communications at the Mackinac Center for Public Policy, told Michigan Capitol Confidential. “Even after the contract expired, taxpayers would be on the hook for more and more money. The change in 2011 forces both sides to the bargaining table without putting citizens on the hook if unions don’t want to negotiate. Repealing that is a bad idea.”

Current law prohibits new union contracts from being retroactive. If a union contract expires and teachers have to pay more for health care as a result, the district is not obligated in its new contract to cover the costs incurred in the interim. The bill, introduced by Sen. Marshall Bullock, D-Detroit, would repeal this prohibition and leave school districts liable for additional costs incurred in times of no collective bargaining agreement.

Bullock has not yet responded to a request for comment.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.