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updated 3/9/2011 9:13:56 PM ET 2011-03-10T02:13:56

Legislation that would give broad new powers to emergency managers appointed to guide financially struggling cities and schools in Michigan moved one step closer to becoming law Wednesday, winning approval from the Republican-led state Senate.

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The Senate passed the main bill in the package by a 26-12 party-line vote. The Republican-led House has passed similar legislation and the bills would head to Gov. Rick Snyder once differences are resolved between the two versions.

Snyder, a Republican, called for emergency manager legislation in January and is likely to sign the bills once they reach his desk. He noted on Wednesday, however, that details of the legislation still are changing as it works its way through the Legislature.

Opponents of the legislation are concerned because emergency financial managers who are appointed by the state would have the power to terminate union contracts held by school teachers and local government workers. Democrats say the measures are an assault on collective bargaining.

'Can of worms'
Managers also could strip local elected officials of most powers, which Democrats say would lead to overwhelming authority invested in someone who is appointed from outside the community rather than elected by local voters.

"I think we're opening up a can of worms," said Sen. Hoon-Yung Hopgood, a Democrat from Taylor. "We need to be very careful about the expansive powers that we are granting to emergency managers."

Supporters of the legislation say it would lead to earlier intervention by the state, perhaps avoiding the initial crisis situations that lead to the appointment of emergency managers.

Sen. John Proos, a Republican from St. Joseph, said the measures could provide "an early warning system" for potential financial problems in cities and schools. Sen. Phil Pavlov, R-St. Clair Township, said early intervention should make appointment of an emergency manager a "rare occurrence."

Troubled jurisdictions could rise
The current state law related to emergency financial managers is affecting about a half-dozen local communities and schools at this time. Only Pontiac, Benton Harbor, Ecorse and the Detroit Public Schools have state-appointed emergency financial managers in place.

Many more communities and schools might fall under the jurisdiction of a revised law, and Democrats objected to so many losing their right to run themselves. Democrats say Snyder is contributing to the problem by proposing deep cuts in state support for local governments and public schools. Snyder says too many are loaded up with debt and paying salaries or benefits out of sync with the private sector.

An amendment to the main bill that would have capped an emergency manager's salary at the approved annual pay rate of Michigan's governor — currently about $159,000 — failed under fairly unique circumstances. Senators tied on a 19-19 vote, and Republican Lt. Gov. Brian Calley broke the tie with a "no" vote, drawing some boos from protesters in the Senate gallery. One protester shouted "shame on you" after Calley's vote.

The atmosphere at the Senate was much calmer than on Tuesday, when hundreds of people angered by the bills crowded into the Capitol rotunda and chanted loud enough to be heard in the Senate where the proposals were being discussed.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: It is not about the budget

  1. Transcript of: It is not about the budget

    MADDOW: Wisconsin , you won. There has been no ceremony, there has been no applause yet, there has been no formal surrender ceremony -- but I am telling you, you have won. Congratulations, Wisconsin . After 22 days of protests in the state that is the cradle of the rights of Americans who work for a living, after 22 days of protests against Republican Governor Scott Walker 's efforts to strip union rights in Wisconsin , the governor has started to crumble. The governor started to cave. The governor started to do what he said he would never do.

    GOV. SCOTT WALKER (R), WISCONSIN : The bottom line is we're trying to balance the budget . And there's really no room to negotiate on that.

    MADDOW: No room to negotiate. That was Governor Scott Walker more than two weeks ago insisting as he did repeatedly that he was not willing to negotiate. He was not willing to budge on union stripping . But as it turns out, that after picking this fight , after saying he would never negotiate, Governor Walker is negotiating now. If you live in Wisconsin , here are some of the headlines that you woke up to in your local newspapers this morning. "The Oshkosh Northwestern ," " Walker refuses meeting with Dems ." "The Stevens Point Journal," " Walker denies Dems ' requests. Governor refuses to meet with senators." This is " The Reporter " newspaper, which is from Fond Du Lac , " Walker says no to meeting." " The Daily Tribune ," which is from Wisconsin Rapids , their headline is " Walker refuses to meet senators."

    "The La Crosse Tribune": " Walker rebuffs request to meet." Newspaper after newspaper after newspaper all across Wisconsin this morning, essentially slamming Governor Scott Walker on their front pages for not budging, for not negotiating, for not being willing to talk, for not being willing to even meet with the state Senate Democrats . With these headlines across Wisconsin newspapers this morning, another conservative firm released yet another poll of Wisconsin voters that showed even from this conservative activist pollster that the state is firmly against Walker 's plan. Five points more against it than they were just five days ago. Also today, the conservative-leaning " Milwaukee Journal Sentinel " front-paged on their Web site a very blunt analysis that Governor Walker is the most disapproved of new governor in the entire nation. Even though that paper endorsed Scott Walker , even though they leaned right, they are also now editorializing against Walker 's union stripping folly. Then came news today that Scott Walker 's own party, the state 's Senate Republicans caucused, and the news from that caucus was not good for the governor. Remember, the governor can only afford to lose three Republican senators and still get his union - stripping bill passed. And three Republican senators have now made public comments that the Republican governor should compromise. And so, after 22 days of escalating protests, after effectively locking down the state capitol , after the video footage of the Democratic state assemblyman being wrestled to the ground by police officers as he tried to go to his office, after the country and the state and even Republicans in his own state turned against him, Mr. "I Won't Negotiate" admits he's negotiating. These e-mails -- Governor Walker 's office releasing e-mails to " Milwaukee Journal Sentinel " today, e-mails that show him caving on key parts of his big union - stripping bill -- offering modifications, offering compromises, budging. This, of course, is not over yet. Senate Democrats in Wisconsin have not returned to the state capitol . These begrudgingly e-mailed offers from the governor are not the same as legislation being withdrawn or new legislation being introduced. But essentially, Governor "I Won't Budge" has been forced to budge. He lost this one. And more importantly, he lost it on the substance. And he lost it publicly in a very big way. And the longer it goes on, the worse he loses it. It is all over but the shouting. Wisconsin , you won. Can we just take a second to let that sink in for a moment? OK. As I said, the out of state Wisconsin Senate Democrats are still out of state . They are not claiming victory on this yet. They say there's no clarity yet that Governor Walker 's budging move at this point. They say those moves are confusing and suspicious. And they're right to be suspicious. We heard the governor talking about his strategy for tricking the Democrats to come back to the state capitol on the prank phone call when he thought he was talking to David Koch , the oil and chemical billionaire. So, as a Wisconsin Senate Democrats continue to be cautious and are not claiming victory, it should be noted that implications nationally of the Democrats winning this fight in Wisconsin should probably wait for a bit. That would be premature. But the Republicans losing this fight ? Not premature to look at that. They picked this fight weeks ago. It is relatively easy to have clarity about what they did now. And I think it's important to have clarity about that because when this story about Scott Walker and the Republicans losing this fight that they picked, gets told by all of the Beltway press sometime in the next 24 to 72 hours whenever they have caught onto it, that story will be told, I promise you, as if this was some story about the budget -- as if this was a fight about whether or not Wisconsin is going to be able to balance its budget . But when the stories are inevitably written, they will be wrong. This was never about the budget . As soon as Scott Walker was sworn in as Wisconsin 's governor, the very first day, he called special session of the state legislature which ultimately passed four pieces of legislation that he favored. Collectively, those four pieces of legislation will end up making the state budget deficit in Wisconsin $140 million worse, not better, worse. That was Governor Walker 's first priority as governor, to make the deficit $140 million worse. Not to close the budget shortfall, but to open it further over the next few years with business tax giveaways, $140 million worth. The big fight over public sector employees was in the end not about what those employees get paid, not about what they contribute to their pensions, not about how much health care costs they pay for -- everything Republicans wanted in terms of fiscal concessions from people who work for the state , they got them. Public employees conceded. They gave Republicans everything they asked for in terms of paid give backs, pension, health care , all the rest of it -- everything with budget impact, the public employees gave up right away, right at the outset. If it was really about the budget , then those concessions would have sort of solved the problem, would have been enough. But it's not about the budget . And so, instead, we have had 22 days of protests over what? Over the stuff that's in these e-mails, the stuff that Governor Walker appears to be caving on now, finally, after all of this time. The fight they've been having in Wisconsin is not about money . It's not about what people get paid. It was about union rights. It was about something that has no fiscal impact whatsoever. It is about stuff that Scott Walker is now effectively conceding. It's not about the budget . They said it was about the budget , but that was to justify doing stuff that had no fiscal impact. Here's how else you know it wasn't about the budget . Governor Walker 's emergency " budget repair bill," that's what he called it, right, also found the time in the midst of this emergency to overturn a Wisconsin law that says insurance companies have to cover contraception. What is the fiscal impact of that? What does that do to Wisconsin 's state budget ? Nothing. The governor also cuts all the money the state spends on family planning services, places that provide access to contraception. They also do stuff like breast cancer screening and prostate cancer screening . The state spends just a little under $2 million annually on those services. But if they stop spending that money , they also may put at risk $9 million that they get from the federal government to support that state service. It's easy math. It's not about the budget . In order for Scott Walker to wage that little war on contraception and prostate cancer screening , he is willing to potentially make Wisconsin 's budget deficit $7 million worse, not make it better, make it worse. It is not about the budget . And it's not about the budget anywhere that Republican governors are doing these things this year.

    In Florida today , we got new Republican Governor Rick Scott , big state of the state address , massive budget cuts to the state 's education system , massive budget cuts in particular to the state 's K through 12 education system , $1.7 billion cut out of K-12 alone, cut out of public schools in Florida . What are you going to do? We don't have a choice. We don't have any choice. We're broke. We've got to make these cuts. K-12 education is being cut at the knees. Yes, but the state needs to save that money , right? Is the state saving that money ? No, the state is not. Governor Scott is giving that money away. The money he is saving by taking it out of schools he is giving away as corporate tax breaks and property tax breaks. So, hey, Florida , those cuts that are going to cut K-12 education off at the knees is going to make your state deficit precisely not better. Those cuts for K-12 are not going to do anything to help your budget deficit . It's not about the budget . They say it is about the budget , it is not about the budget . In Ohio , New Republican Governor John Kasich delivered his state of the state address today as well. Mr. Kasich and state Republicans , however, have just sort of forgotten to try to even make it look like it's their agenda -- make it look like their agenda has anything to do with the state 's budget . They put forward an even more draconian union - stripping proposal than even the one that's being tried in Wisconsin . Again, stripping collective bargaining rights is not a fiscal issue, it's a rights issue. But Mr. Kasich and Ohio Republicans outdid themselves on the "it's not about the budget " front by including a gay marriage ban in their supposed budget rescue bill. Gay marriage is already banned in Ohio , but this apparently provides for an extra, double, triple, quadruple ban. What is the fiscal impact of extra triply, quadruply banning gay marriage in Ohio ? Nothing. It has no budget impact. It is not about the budget . " The Columbus Dispatch " newspaper has one of those awesome widgets on their Web sites where you can try to balance the budget yourself. You can choose things for Ohio that would make the budget problem worse or make the budget problem better. Banning gay marriage -- not one of the available options because it does neither. Stripping collective bargaining rights? Not one of the options. Because those things are not actually about balancing the budget . Those are things that are being pursued under the guise of economic stress. But it's actually in Michigan where this is maybe the most stark and the most amazing. In Michigan , the new Republican governor is a man named Rick Snyder . Rick Snyder does not get a lot of national attention, but boy, howdy, he ought to. What Governor Snyder is doing, I think, tells you in particular how clueless the Beltway press has been about what is actually happening in the states in Republican politics. If you listen to the Beltway press, even those who are willing to be critical of the Republicans , they say things like -- well, real fiscal conservatives would consider raising taxes as well as cutting spending to address their state 's budget shortfalls. That is actually happening in some places. Look what they are trying to do in Michigan . Rick Snyder has proposed an actual tax increase. Michigan has a budget problem. So, he's going to do the responsible thing, right? He's going to raise taxes. He is going to raise taxes on seniors and on poor people -- $1.7 billion in tax hikes for Michigan seniors and Michigan 's poor people , and for people who want to make tax deductible donation to public universities . Sorry, you know, Michigan has a budget problem. We're going to have to raise a whole lot of money from you. Poor people , old people, people supporting public schooling , you have to take the hit because the state needs to save that money . Is the state saving that money ? No, the state is not. Governor Snyder is taking all of that money that the state will gain and he is not using it to close the budget gap. He is giving it away in the form of $1.8 billion in corporate tax cuts. He is taking in $1.7 billion in higher taxes from poor people an old people and giving it away, $1.8 billion to businesses. Net short term effect on the state 's budget ? Zero or worse. It is not about the budget . It is really not. It is not about the budget in Wisconsin , it is not about the budget in Florida , it is not about the budget in Ohio , it is not about the budget in Michigan . But what Michiganders know and what Michiganders have been trying to get the rest of the country to pay attention to is that what these Republicans are doing in the states is not just not about the budget . It's about something way worse than that. Stay with me for a moment here. There is more to this.

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