To make matters worse, the city was ordered by an arbitrator in February to give a series of retroactive raises – one as high as 3 percent – to one of its largest police unions going back to 2006. That will cost the city an additional $1.5 million, according to Ann Arbor Chief Financial Officer Tom Crawford.

Ann Arbor’s financial hard times highlights what many believe are a problem with Public Act 312. That act makes arbitration mandatory for labor disputes in municipal police and fire departments when negotiations fail.

State Representative Joe Haveman, R-Holland, introduced House Bill 5325 that would give arbitrators more criteria when making a decision. It would ask arbitrators to consider the financial impact five years from the date of the award as well as take into consideration the climate of the state and whether the municipality can cover the costs and still keep a balanced budget.

In Ann Arbor’s case, the arbitrator pointed to a $10 million plus general fund reserve as evidence the city could afford the retro-active raises.

Ed Jacques, director of member services, Police Officers Association of Michigan, called the reform of PA 312 “unnecessary.”

“The arbitrators know what ‘ability to pay’ is,” Jacques said. “It’s too much. The process works very well. I think it is the great equalizer.

Jacques said a trend is emerging where employers are taking unions to arbitration.

“They want more back and they know they are not going to negotiate a substantial health care cut,” he said. “You are not going to negotiate a 0-percent raise for three years. No one will take that back for ratification.”

But Crawford said that when an arbitrator looks at a city’s savings and says it should be used for retroactive raises, that imposes the arbitrator’s will over that of the community. Crawford said taxpayers may want that surplus money spent on projects other than police and fire salaries.

Haveman said the arbitrators make decisions that elected officials are voted into office to make.

Some conservatives pointed to his voting record as a former state representative as evidence that he was a RINO (Republican In Name Only).

So there was some eyebrows’ raised this week when Nofs was one of two GOP senators to vote no on Republican Senator Patty Birkholz’ legislation to reform how public schools define tenure for teachers.

Senate Bill 638 claims that tenure laws make it difficult to dismiss teachers as well as give merit-based pay. Twenty of the 22 Republicans voted for it. Nofs did not. According to Michiganvotes.org, the bill passed by a 20 to 13 vote on Dec. 3. It has been received in the state house and referred to the Senate Education Committee.

Jack Hoogendyk, a conservative blogger affiliated with Americans For Prosperity, sent an e-mail blast to his readers calling attention to Nofs’ vote and questioned why the newly elected senator would vote against his party.

Hoogendyk inferred Nofs’ no vote could be because of contributions from the teachers’ union – the Michigan Education Association.

Birkholz said Nofs’ never told her specifically why he was voting no.

“He comes from a district where the MEA has a fair amount of clout,” Birkholz said.

Joan Fabiano, founder of the tea party group Grassroots in Michigan, said, “Mike Nofs’ record is not one that could be called conservative. The fact that he voted voted NO on a bill that would begin to address the problem of tenure is disturbing.”

Nofs said he votes to represent his district, which includes Jackson and Calhoun counties. Nofs estimated his district was 52 percent Democrat.

“What is my district?” Nofs asked rhetorically. “I’m a firm believer you are a representative of the people. … You can label me a RINO. … It is not about Mike Nofs. … I’m reflective of my district.”

“It’s not about a political ideology. It’s about doing what is right.”

Nofs said he voted against the bill because there was no mention of criteria for how to establish tenure and how to determined “if a teacher is a bad teacher.”

“I’m not going to vote for a bill that isn’t done,” Nofs said.

Jones, a Republican from Grand Ledge, brought a resolution Tuesday to close the office of the First Gentleman and cut the two positions that serve as his aides. Dan Mulhern is spouse of Granholm.

“At a time when our school districts are facing severe budget cuts, it’s frankly unconscionable that the state is still funding an office and staff for the governor’s spouse,” Jones said in a press release. “When the budget is in shambles, pencils and paper always trumps pomp and circumstance.”

Mulhern wrote on the state of Michigan’s Web site that he is a full-time volunteer “or as much time as I can find.” Mulhern makes public appearances in behalf of his wife.

“There are two staff positions within the Governor’s executive office that assist the First Gentleman with projects the Governor has asked him to champion of her behalf and on behalf of the citizens of our state,” Liz Boyd, the Governor’s spokeswoman, wrote in an e-mail. “Those two positions — one of which is currently vacant — combined are paid less than $85,000.”

“The First Gentleman volunteers his time on behalf of state government and the citizens of this state are fortunate to have him serving on their behalf,” Boyd wrote.

Jones disagreed.

“If I were Governor, my wife would not have any staff paid for by the Michigan taxpayers,” he said. “In this time of crisis, Daniel Mulhern should set an example and not have any taxpayer-paid staff.”

“My constituents are angry,” Jones said in a press release. “Many tough cuts are being made in the state and yet the spouse of the governor has staff funded by their tax dollars. Whether we have a first gentleman or first lady this type of waste must stop. We don’t need a ceremonial office; we need more money for our schools.”

The offices of GOP governor candidates Rick Snyder, Mike Bouchard, Peter Hoekstra and Mike Cox were contacted by Reporting Michigan and asked if they would keep funding for their spouses if elected.

Only Bouchard responded.

“Pam is just like a lot of working mothers. She handles a full time career and our children and does it all now without a staff,” Bouchard said in a statement released by his office.

”He doesn’t anticipate that changing (if elected),” said Kathryn Martin, a spokeswoman for Bouchard.

Mulhern’s paid staff pales in comparison to that of the First Lady of the United States.

Plus, we would have one less government agency micro-managing our lives, destroying jobs and the economy. We would also capture back more of our liberties and freedom of choice that was bestowed on us by our founders in a limited republic.

The EPA stated its endangerment finding included six greenhouse gases – carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. It now has the ability to enforce regulations on businesses to meet its to-be-determined regulations under the Clean Air Act.

Experts said Monday that the EPA could take as long as a year to get new regulations in effect.

Michigan has the highest unemployment rate in the country at 15.2 percent and some worry more costs to business will only cause the jobs’ slump to continue.

“It would have major impact,” said Russ Harding, who lectures on environmental issues across the state for the Mackinac Center For Public Policy. “Any industry would be covered on this. Shopping malls, commercial establishments. … It is a huge additonal cost for businesses just to regulate the fact they have boilers.”

Harding said businesses would have to apply for permits, which would be a lengthy process and could cost as much as $250,000.

“It’s a huge transaction cost at the very time businesses can least afford it,” Harding said.

Doug Roberts Jr., director of environmental and energy policy for the Michigan Chamber of Commerce, said they sent a letter in opposition to the EPA’s findings during the public comment.

“We are very concerned that the EPA has taken action,” Roberts said. “It could have a very negative effect on Michigan’s economy. The price of energy we would expect to increase, it would have wide ramifications. We are a manufacturing heavy state and manufacturers rely on affordable energy.

U.S. Congressman Pete Hoekstra joined in the protest of the EPA’s ruling.

“The administration is substituting the will of the Environmental Protection Agency and its bureaucracy for that of the American people,” Hoekstra said in a press-release. “In the absence of a bipartisan solution to America’s energy future and in an attempt to demonstrate progress at the climate summit in Copenhagen, the President has authorized the EPA to create rules for which Americans have not shown support through their congressional representatives. Instead, the United States should continue to work to improve the environment every day through technological breakthroughs and innovation. Adding more costly government mandates and increasing energy costs will result in further limiting economic growth and job creation in the currently struggling U.S. economy, especially in a manufacturing state like Michigan.”

The announcement came the same day representatives from 192 countries attended the Copenhagen Summit, which started this week and runs through Dec. 18. The countries may reach agreement on financial deals to cut emissions.

Harding said the announcement was “purely political.”

“This is timed to give Obama something to taken to Copenhagen,” Harding said.

Lisa Jackson, the EPA Administrator was nominated for the position by then President-elect Barack Obama in December of 2008. She was approved by the U.S. Senate.

Jackson said Monday the last three decades have seen an alarming increase in greenhouse gases.

“That increase is deteriorating the natural balance in our atmosphere and changing our climate,” she said in a televised press conference. “There is an overwhelming amount of scientific study show that the threat that is real as does the evidence before our very eyes

Mike Shriberg, the policy director of The Ecology Center in Ann Arbor, said businesses have to adapt to changing times.

“It’s pretty simple, really, Michigan businesses can continue to operate like it’s the 19th or 20th Century and ignore the ever-mounting economic, health and environmental consequences of climate change,” Shriberg wrote in an-email. “Or, they can try to position themselves as winners in the clean energy economy. China has already surpassed the US in growing clean energy jobs. Wind is now providing more jobs than coal in the U.S., yet a small set of special interests in Michigan and across the country is still following a “head in the sand” approach to the opportunity that addressing climate change presents. Michigan businesses have to be leaders in the 21st century if they are to thrive. Ignoring the scientific, cultural and economic imperative of climate change is looking to the past, not the future.”

Shriberg also said the EPA’s regulations will help fix some of the inefficiencies that corporations have in their use of power.

When Littman, a senior economist with the Mackinac Center For Public Policy, made his projection the unemployment rate in the state was reported at 12.6 percent for April.

Governor Jennifer Granholm’s office said at the time, they thought the year-end unemployment rate would be just above 13 percent, citing that was the conclusion of a University of Michigan study.

Michigan’s unemployment rate was 15.1 percent at the end of October, according to the U.S. Department of Labor.

And Littmann said there isn’t relief in sight as long as the economic policies in the state and nation remain in place.

Littmann retired from Comerica Bank in 2005 as senior vice president and chief economist after a 35-year career in charge of Comerica’s Economics Department and Research Library.

He said if you factor in discouraged workers and part-time workers who want full-time employment, that unemployment rate tops 26 percent in Michigan and 17 percent in the country.

For the unemployment rate to drop, there must be growth in the real gross domestic product for three consecutive quarters, Littmann said.

The U.S. Department of Commerce estimated that the country’s real gross domestic product – the output of goods and services produced by labor and property in the U.S. – increased by 2.8 percent in the third quarter. The real GDP decreased by 0.7 percent in the second quarter and dropped by 6.4 percent in the first quarter.

“The U.S. economy must have at least 3-percent real GDP growth for nine months before the unemployment rate goes lower,” Littman wrote in an e-mail. “This cannot occur unless tax burdens decline (they are rising, just as they are in MI), energy prices go lower (they are set to rise this winter), and economic certainty improves (with better incentives, both nationally and in MI). All the opposite forces are in play and guarantee rising unemployment rates for the state of Michigan and for the U.S.”

Littman wrote he’s sticking with his forecast that unemployment will rise to 17 to 20 percent over the next six months.

The state’s unemployment rate hovered around the 5-percent mark for much of the late 1990s. It got as low as 3.1 percent in April of 2000.

University of Michigan economist Don Grimes says the job market of 10 years ago is gone. He said it’s hard to know if the state can return to the 5-percent unemployment rates of the 1990s.

State Representative Dave Agema, R-Grandville, says that is an expense Michigan can no longer afford. Agema introduced House Bills 4969 and 4355 in May and hopes they will be addressed on the house floor within the next couple weeks. The bills require a personnel agency and public employers or contractors use the “E-verify” system to check the residency status of its workers.

E-verify is an Internet-based system that allows an employer, using information reported on an employee’s Form I-9, Employment Eligibility Verification, to determine the eligibility of that employee to work in the United States. There is no charge. The system is operated by the Department of Homeland Security in partnership with the Social Security Administration.

Agema said the legislation is needed for three reasons:

Jobs paid for with government funds should go to Michigan residents who need jobs with unemployment the highest in the country.
“Taxpayers money should not be giving illegals jobs in this state, not when we have unemployment at 15 percent,” Agema said. “It’s a job issue.”

Agema said that $600 million Michigan residents pay for the costs of illegal aliens could be used elsewhere.

And, it’s a homeland security issue.
“To me, this is an absolute no-brainer,” Agema said. “The people of Michigan are sick of paying for illegals’ jobs and benefits.”

And there should be bi-partisan support for his legislation, Agema said.

“A lot of people in the state of Michigan are union members, and they are losing their jobs,” Agema said. “Illegals should not be getting jobs in the state of Michigan with taxpayer dollars. It is unbelievable to me.”

But the Michigan Chamber of Commerce is not supportive of Agema’s legislation.

“This legislation seeks to make Michigan employers the ‘immigration police,’” said Wendy Block, Director of Health Policy and Human Resources for the Michigan Chamber, in a press release. “Rather than place this mandate on employers, many of whom are ill-equipped to handle this requirement, we believe law enforcement agencies should continue to take primary responsibility of federal immigration laws.”

“Congress intended for E-verify to be voluntary,” said Jim Holcomb, Vice President of Business Advocacy and Associate General Counsel for the Michigan Chamber, in a press release. “E-verify, or some other form of mandatory electronic verification, should only be mandated on the federal level in the context of federal immigration reform in order to avoid a piecemeal approach to the immigration issue and headaches for firms operating in multiple states.”

“E-verify cannot detect many forms of document fraud or identity theft and is, by no means, foolproof,” Block said. “As a result, many employers and employees, who may have to wait days if not weeks to resolve a discrepancy or error, will be left in limbo if the system is mandatory.”

Federation For American Immigration Reform, a non-profit organization looking to reform the nation’s immigration policies, said E-verify is very simple to do.

“It takes 13 seconds,” said Bob Dane, press secretary for FAIR. “It takes you longer to make a cup of coffee than to verify a job applicant’s eligibility to work.”

Dane said critics of E-verify are concerned about the loss of cheap labor.

“They are scared to death that the E-verify movement is sweeping the nation,” Dane said. “It is an obstacle that ruins their plans flow of cheap illegal labor. The American public likes E-verify. It creates more job opportunities for a legal US resident to get and it increase wages.”

FAIR estimate the cost to Michigan taxpayers for illegal aliens was $604 million, with about 75 percent of that attributed to education. That figure includes the cost for education of children, jail costs and providing medical services, including emergency room visits.

It doesn’t include displaced U.S. residents who lost jobs given to illegal aliens.

FAIR estimates there are 125,000 illegal aliens in Michigan. Nationwide, FAIR said about 8.3 million illegal aliens hold jobs in this country.