November 15, 2012 – Michigan taxpayers are already feeling the bite from their rejection of a law permitting state takeovers of ailing municipalities. The yield penalty on debt of Michigan issuers reached a five-week high yesterday after voters killed Public Act 4 on Nov. 6. The law gave state-appointed emergency managers powers, including firing elected officials and canceling union contracts, to balance budgets and avoid the fate of three California cities that sought bankruptcy protection this year. Unions led opposition to the 2011 law. Yet Republican Governor Rick Snyder, who championed it, said repeal increases the chances of Chapter 9 filings, which can spark bondholder losses. While Detroit averted a takeover in April by agreeing to a state plan to erase its deficit, five cities and three school districts have emergency managers, including Flint and Pontiac.