Laura speaks with Crain’s Detroit Business Reporter and Editor of the new “Detroit 2.0″ special section, Amy Haimerl, about the future of Detroit finances and business. They discuss the “Big Bet on Detroit,” and according to Haimerl there are several. As the city works through this financial crisis, Haimerl says the first big bet is the partnership between Michigan’s Republican Governor Rick Snyder and Detroit’s Democratic Mayor Mike Duggan to revitalize the city in the post-bankruptcy era.
At 22:10 of the town hall face off last night, moderator Stephen Henderson, Detroit Free Press Editorial Page Editor, asked the candidates about Detroit’s bankruptcy and the emergency manager. Here is a transcription of the questions, the answers and the follow up from Republican candidate Gov. Rick Snyder and the Democratic challenger Mark Schauer.
Freep columnist Nancy Kaffer weighed in on the topic in this piece today, and moderator Christy McDonald, from our Detroit Journalism Cooperative partner Detroit Public Television, reviewed the town hall today on WDET’s Detroit Today.
STEPHEN HENDERSON: Detroit, the city of Detroit, has an emergency manager and is trying to get through a complicated bankruptcy. Is this the right policy, the right approach to the relationship between cities and states? Is there more the state needs to do to prevent cities from falling into those financial problems? And what do they need to do to help them out on the back end?
GOV. RICK SNYDER: That was a big question, Stephen. Let me start the other way with actually what we’re doing now is we’re working on an early warning system to help communities because I never want to appoint an emergency manager, and it’s not a subjective process folks. It’s an objective process. I don’t simply decide that. Certain conditions in terms of a financial emergency have to exist first.
With respect to Detroit I went through that in a very systematic way. Tring to work with the prior administration in Detroit to say “Let’s just work together.” That didn’t work. We did a consent agreement to say the city needed to do certain thing to get the city out of trouble. Those things weren’t done. So then it came to an emergency manager. So I appointed an emergency manager. And then it came to the question of actually putting Detroit in bankruptcy. That was one of the toughest decisions to be made in the United States. It was the right decision to make.
Look at where we are today. We’re within a month to two months most likely of coming out of bankruptcy. We would have shed $9 billion of liabilities. If we hadn’t done this, the operating budget for the city of Detroit, more than 60 percent would go to paying past debts. There would be no money for services. In the meantime while this has been going on, what’s been happening? Streetlights have been going up. Trash is being picked up. Public safety is improving. Violent crime is down in double digit percentages in the city of Detroit. All these good things are going on and now we’ve transitioned back out because my goal is to have the emergency manger come in, do their job, get out, be done and get it back to the community with good oversight though so it doesn’t fall backwards. Stop and think: Have you ever thought you’d see Detroit as well poised for a bright future as you see today?
HENDERSON: Congressman. You have opposed the emergency manager legislation, how would you handle all of this differently?
SCHAUER: Well, first I believe in democracy. The people voted in 2012 to overturn that law. As governor, placing myself becoming governor in 2011, I would have abided by the will of the voters. What I would have done is personally led. As governor, I will be in Detroit. I will work out of the office on Cadillac Place and be a full partner with Mayor Duggan for the comeback of Detroit. Mayor Duggan is supporting me because he knows that I will be a strong and active partner. We need good jobs in our communities, but what I will do as governor, in addition to personally lead, is put together financial transition teams where we can be proactive. What our current governor has done, two things, is engaging in a strategy of fighting fires, fighting crises. Of course a $69 million revenue-sharing cut for police and fire in the city of Detroit didn’t help. But after cities get into financial crisis and school districts get into financial crisis, they assign emergency managers.
The second thing, quickly, is I never would have cut retiree pensions. Our constitution is clear: pensions are guaranteed. Again, on top of the pension tax, cutting pensions through the emergency manager, as governor himself, is wrong. It’s hurting people. It’s no way to build a strong economy.
HENDERSON: Governor, I want to give you a chance to respond to the question about democracy. You’re suspending local democracy when you send in an emergency manager. People in the state voted not to have emergency managers. How do you address that?
SNYDER: No, what they said is, we’ve had EM going back to Gov. Blanchard in 1988. There have been a lot of EM before I stated this process. In fact, I inherited a number of them. What we did was enhance their skill set so they could do their job and get out. There was a ballot proposal that said certain aspects of it people didn’t like. We listened to that. We didn’t do those things. We put something back in place so we could move forward.
Think about this: traditionally emergency managers were there way to long. So Detroit, other than the bankruptcy, the city is now running the city of Detroit. We have an emergency manager that now has left in Pontiac, Benton Harbor, Allen Park, Ecorse. It’s working, folks. We’re getting thee cities back on their feet that didn’t have an opportunity to before. Because we know how big the messes were.
I’ve asked the Congressman. If you’re not going to do things like looking at bankruptcy, a very last resort. And again, it is constitutional. A federal judge said that. I’ve asked the question is, what are you going to do to pay those $9 billion in liabilities? How are you going to have a budget where you have 60 percent going to liability costs?
HENDERSON: Very quickly, Congressman.
SCHAUER: We’ll go back to a hypothetical if I had been governor without an emergency manager, that would not have changed the books for the city of Detroit. I’m not questioning whether the city of Detroit needed to go bankrupt but I would have personally led rather than having an unelected, unaccountable person do it and I would never have thrown Detroit city pensioners, police officers, firefighters under the bus. That hurts them.
SNYDER: We didn’t leave them under the bus. We did the grand bargain, and I want to thank the bipartisan support of the Legislature to work with the foundation community. Retirees did take cuts but we minimized them. I appreciate them. They ended up supporting the agreement and I respect them for their great role in this settlement.
At our Detroit Journalism Cooperative partner, Detroit Public Television, the MiWeek team tackles how technology is helping Detroit’s blight fight. The trio also examines how the transition of power from Emergency Manager Kevyn Orr to Mayor Mike Duggan and the city council will work in the coming weeks.
WDET’s Laura Weber Davis and Sandra Svoboda — along with callers — forecast what the new city governance arrangement means for the city and the bankruptcy case.
Local journalist and historian, Bill McGraw has an article in this month’s National Geographic magazine about how nature has reclaimed some of Detroit’s trash dumping areas. McGraw says many illegal and legal dumping areas in Detroit that have been neglected are sprouting trees, grass and ponds. But McGraw says the city is working on cleaning up sites that remain active dumping sites. Here he is on Detroit Today.
Detroit Today looks at the financial challenges facing the new regional water authority with Crain’s Detroit Business reporter Chad Halcom. Halcom’s recent article in Crain’s Detroit Business lays out the financial issues facing the Great Lakes Water Authority, the new regional authority formed as part of the Detroit bankruptcy proceedings and negotiations.