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SB 571 bans unions from using corporate payroll to raise PAC money

December 22, 2015

Corporations with their own corporate political action committees (PAC) would no longer be allowed to administer the PACs of their employees’ labor unions through their payroll system, under a hidden provision baked into the reworked version of legislation rushed through the Legislature Wednesday night.

The “significant change” made to HB 0571, according to elections attorney Eric DOSTER, puts private and public sector employers on the same footing as far as potentially stopping employers’ ability to collect political donations for organized labor through automatic deductions likely negotiated through a labor agreement. 

The U.S. Supreme Court’s Citizens United decision five years ago gave corporations the ability to create their own PACs. Because of that, to allow corporations to administer their own PACs while also administering contributions for a union PAC would create a conflict, said Doster, who has served as the legal counsel for the Michigan Republican Party. Changes to Section 54 of the   SB 0571 address that. 

One source described this revision as a “head shot” to organized labor and the Democratic political candidates they support. Of all of the changes made to 0571, this one, and a second that bans schools and local government from addressing a millage or bonding election 60 days before an election, are the most significant, sources tell MIRS. 

The new   SB 0571 sent to Gov. Rick SNYDER for his signature is similar to the legislature stopping public schools from using their in-house resources to collect dues for their employees’ bargaining unit through payroll deductions. The law was upheld in federal court (See “6th Circuit Allows Law Banning Schools From Union Dues Collection,” 5/8/13). 

“The unions may not like it, but the (Michigan Education Association) can’t use public bodies’ payroll for their PAC contributions and they’re doing just fine,” Doster said. 

House Democratic spokesperson Katie CAREY said due to the way the substitute to   SB 0571 was “rammed through” 10 minutes after it was dropped, the caucus is still taking a “careful and thorough review” of the bills. 

“We want to make sure we know all of the implications that they put into the bill,” Carey said. 

MIRS, Dec. 18, 2015
Local Government, School Groups Asking For Veto Of SB 571
School districts and local government organizations are seething after discovering a late-night change to   SB 0571 would ban officials from addressing a millage or bonding election 60 days prior to Election Day.

The relevant section in the amended version of   SB 0571 that slipped through the Legislature just prior to its adjournment states that a public body or a person representing a public body cannot use public funds or resources for communication relating to a local ballot question 60 days before the scheduled election. A violation could cost an individual up to $1,000 and a community or district up to $20,000. 

That language was not in any prior versions of the bill and seemed to come out of left field for the local governments and school districts affected, many of which rely on millages or bonding proposals to fund improvements or even basic operations. 

Current law already dictates that public entities may not use public funds to advocate one way or another for local ballot questions voters are asked to decide. 

But those representing local entities are concerned the new language outlined in   SB 0571 would prevent them from bringing up the subject at all in the key weeks before elections — the time when voters would likely have the most questions. Many fear that the language could cause future millage requests to suffer as a result. 

The bill as worded in theory could prevent officials from expressing their views without violating the act, put local public access broadcasts of city council meetings or debates at risk and potentially ban community newsletters or election reminders commonly mailed to residents, said Chris HACKBARTH of the Michigan Municipal League. 

In addition, the provision would create inconsistent treatment between communications with residents on statewide and local ballot questions, he continued. 

“This language puts an undue burden on communities and their residents, blocking access to unbiased, objective communication on the local issues that matter most to the residents in every community in Michigan,” he said. 

Some have argued the current law allows for some districts to get away with more than simple voter information communications, however. 

Michigan Capitol Confidential, a publication backed by free-market advocacy think tank Mackinac Center, has reported several instances of supposed abuse of the law that went beyond voter information and into advocacy for the ballot question. A recent report referred to   SB 0571 as a ban on “taxpayer funded electioneering.” 

“Although the state’s campaign finance law already prohibits municipalities and school districts from expressly advocating a ‘yes’ or ‘no’ vote on a particular ballot measure, many of them find ways to influence voters without crossing the forbidden ‘express advocacy’ line,” the publication’s most recent report on the issue reads. 

For instance, the Lansing School District sent out a flier shortly before a 2010 bond millage that read, “Preserve Our Heritage. Fund Our Future,” according to Capitol Confidential. In Saline, the high school posted a video with a school official directly asking for support. 

Elections attorney Eric DOSTER said these problems show how locals and school districts are using the law to avoid using expressed advocacy while painting “doom and gloom” scenarios about the impact of a “no” vote with taxpayer money. 

“It’s akin to issue ads,” said Doster. “They can say if this issue fails, your children will be turned out on the street.” 

Under   SB 0571, schools or local officials wanting to advocate for a new-money ask can still donate privately to an independent committee and do it without public resources being involved, he said. 

But Scott KOENIGSKNECHT, superintendent of Ingham Intermediate School District, said he’s never heard of an intentional issue of abuse in his or any other school district in the state. 

“If there are individual instances of abuse, the state could deal with the individual district that went too far,” he said. “This prohibits districts from even putting information out there, which I believe they have a right to do.” 

Both the Michigan Association of School Boards (MASB) and The Michigan Association of School Administrators (MASA) have called for a veto from Gov. Rick SNYDER. 

In a statement posted to its website, MASA said the legislation “Would have a major impact on the ability of local governments and school districts to say anything about local millage and bond questions.” 

Jennifer SMITH of MASB said it’s unclear whether a superintendent could even answer a call from a concerned voter if it was related to a ballot question. That lack of ability for districts and boards to connect with residents and answer questions could have a real impact on whether future asks from voters are successful, she said. 

“We’re already banned from saying vote yes or no. All we can do is educate,” she said. “It’s ironic that this came in the guise of more information and having more informed voters. This seems to go against that rhetoric — we want more informed voters, but we’re keeping them from being informed.” 

After hasty changes to the bill were made in the House late Wednesday evening and eventual passage by both chambers, many organizations have expressed trepidation with the ramifications certain new provisions of the bill would have if signed into law. 

Another change contested by some after the bill’s passage would no longer allow corporations with their own corporate political action committees (PAC) to administer the PACs of their employees’ labor unions through their payroll system (See ”  SB 571 Bans Unions From Using Corporate Payroll To Raise PAC Money,” 12/17/15).

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