Detroit Moves Against Unions

Faced with declining population, worsening unemployment, and the resultant loss of tax revenues, the lavish employee union contracts are no longer sustainable. Detroit, once a great city, has now fallen into ruin. Perhaps, finally, the time is ripe for them to get their house in order.

Excerpt: DETROIT—A new state law has emboldened the Detroit mayor and schools chief to take a more aggressive stance toward public unions as the city leaders try to mop up hundreds of millions of dollars in red ink.

Robert Bobb, the head of the Detroit Public Schools, late last week sent layoff notices to the district's 5,466 salaried employees, including all of its teachers, a preliminary step in seeking broad work-force cuts to deal with lower enrollment.

Earlier last week, Detroit Mayor Dave Bing presented a $3.1 billion annual budget to City Council in which he proposed higher casino taxes and substantial cuts in city workers' health care and pensions to close an estimated $200 million budget gap.

Mr. Bobb, already an emergency financial manager for the struggling and shrinking public school system, is getting further authority under a measure signed into law March 17 that broadens state powers to intervene in the finances and governance of struggling municipalities and school districts. This could enable Mr. Bobb to void union contracts, sideline elected school-board members, close schools and authorize charter schools

Mr. Bobb, appointed in 2009 by Democratic Gov. Jennifer Granholm and retained by Republican Gov. Rick Snyder, pledged last week to use those powers to deal decisively with the district's $327 million shortfall and its educational deficiencies. Mr. Bobb raised the possibility of making unilateral changes to the collective-bargaining agreements signed with teachers less than two years ago.

Read full WSJ article here.