Some of Michigan's most financially distressed cities were engulfed in uncertainty on Wednesday after voters struck down a law that gave state-appointed officials sweeping authority to make decisions for those communities.
The referendum in Tuesday's election asked voters whether Michigan should retain a recently enacted state law that allowed the governor to appoint "emergency managers" with broad oversight of financial decisions, budgets and union contracts for struggling local governments. The law was intended to help municipalities avoid bankruptcy or default, but it has been criticized for infringing on the rights of local governments.
Unofficial results from the Michigan secretary of state's office showed that voters had rejected that law 53 percent to 47 percent. Ballots from seven precincts remained uncounted, but they appeared unlikely to influence the outcome.
Emergency managers currently oversee three school districts in Michigan, including the Detroit public schools, and the city governments in Benton Harbor, Ecorse, Flint and Pontiac. Now it is unclear what the vote means for their work, as well as for a fledgling financial consent agreement between the state and Detroit, which has wrestled with billions of dollars of long-term debt and nearly ran out of money this year.
"I am disappointed because it does make life more complicated," Gov. Rick Snyder said to a room full of reporters on Wednesday. "I believe Public Act 4 was a good law. It was working well."
Passed by the state's Republican-led Legislature in March 2011, Public Act 4 replaced an older emergency manager law from 1990 and granted more control to those sent by the state to resuscitate local communities on the brink of bankruptcy.
Among the voices that have vehemently opposed the law, labor unions were livid because it gave emergency managers the authority to tear up contracts that cities had already agreed on. Critics called the law undemocratic and an example of "state bureaucrats" overstepping their bounds.
"People are used to electing folks to represent them," said Greg Bowens, a spokesman for Stand Up For Democracy, a group that pushed for the ballot measure on the law. "That duty of elected officials is sacred and cannot just be wiped away because of a credit rating. People found that offensive."
The possibility that an emergency manager might take over Detroit, Michigan's most populous city, was narrowly averted last spring. The consent deal granted state officials a role in guiding the city's finances and used, at least in part as a legal underpinning, the emergency manager law that voters rejected Tuesday. State officials said Wednesday that the deal would remain intact and that the election outcome had no effect on the city. But others disagreed.
Stand Up for Democracy, backed by labor unions like the American Federation of State, County and Municipal Employees, began circulating ballot petitions to revoke the emergency manager law in June. The more than 200,000 valid signatures that the group collected were easily enough to put the question on the statewide ballot on Tuesday.
As the dust settled on Wednesday, Mr. Snyder and other state officials said emergency managers around the state would remain in place under the older emergency manager law, though they no longer have the ability to undo the provisions of labor contracts. All consent agreements established while the law was in effect would remain valid, said Terry Stanton, a spokesman for the State Treasury Department.
In a statement on Wednesday, Mayor Dave Bing of Detroit, who had opposed the emergency manager law, also said that Tuesday's vote would not alter the city's new initiatives. "I am confident that my administration, in cooperation with the Detroit City Council and the State of Michigan, will find the right path for continuation of our much-needed reforms," he said.
But Al Garrett, the president of the American Federation of State, County and Municipal Employees Council 25, said he planned to meet with lawyers in the coming days to discuss potential legal action that could void the state's consent agreement with Detroit.
"There's no question that there's going to be litigation," he said, adding that without the pending threat of an emergency manager takeover, the agreement would not exist. "We know there's still going to be some legal battles."
Correction: November 8, 2012, Thursday
This article has been revised to reflect the following correction: An earlier version of this article misspelled the name of a Michigan city overseen by an emergency manager. It is Ecorse, not Escorse.
This article originally appeared in The New York Times.