Some state lawmakers say Michigan should make it easier for cities to collect income taxes. Legislation making its way through the state House would help Detroit collect delinquent taxes. It would also require employers outside of Detroit to withhold income taxes for city residents. Here’s more from the Michigan Public Radio Network.
As the Legislature considers solutions for education problems in Detroit, the MiWeek team discusses to what extent “Detroit fatigue” has infected the conversations. The weekly program airs on Detroit Public Television, one of the Detroit Journalism Cooperative partners.
Just as many Detroit bankruptcy watchers predicted, former Emergency Manager Kevyn Orr says he will head back to the Jones Day law firm in Washington D.C. The University of Michigan law grad spent more than a decade at the firm, working on bankruptcy cases, before Gov. Rick Snyder named him Detroit’s emergency manager in March 2013.
Orr, who lives in the Washington area, spoke at the Lansing Chamber Luncheon.
The Detroit Free Press’s Nathan Bomey wrote:
Orr, who resigned as emergency manager on the day Detroit exited bankruptcy in December, said he considered a variety of opportunities. “I’ve met with a number of great folks, and I’ve been fortunate enough to be able to entertain a number of offers, but I think I’m gonna go back into law at least for some period of time,” he said. Asked what he would be doing at Jones Day, he said: “Restructuring, strategic counsel, crisis management. It’s what I’ve done for the past 30-plus years.”
Orr currently is working as a consultant to the emergency manager for Atlantic City, N.J., but The Press of Atlantic City reports he will step down from there by the end of this month..
It took him little way into his 2015 State of the State speech, but Gov. Rick Snyder gave Detroit, its bankruptcy and its emergence from it a few minutes during the annual address last night.
Here’s audio of the whole speech:
Here’s what he said about Detroit:
(Begins at 16:11 into the speech) In terms of local government, one thing I have to mention in terms of opportunity and great outcomes, is the city of Detroit. We emerged from bankruptcy from the city of Detroit, a tremendously hard, difficult process that many people came together to do special things that stand out. And I do want to recognize the people that really made that happen, I want to recognize the retirees who made a sacrifice, who went through very difficult times and they were with us though to support the grand bargain. I want to recognize the hard work of the people at the DIA in terms of raising resources, the foundation committee for raising resources, all the great work that took place through this process to make Detroit a stronger, better place. In particular, I want to thank Mayor Duggan. Mayor, thank you and the city council for your strong effort. (APPLAUSE)
A gentleman, a fellow U of M alumni who did tremendous work, we want to get him back in the state of Michigan Kevyn Orr. (APPLAUSE) and some of the individuals couldn’t join us, but Judge Rosen and Judge Rhodes did tremendous work in this effort, and I want to thank each and every legislator, for your conference, your courage to come together to stand up as Michiganders to say we are all one state. We’re strongest when we recognize it’s Detroit, Michigan, and the thing I’m proudest to say, after how many decades can each one of us say now that we all have the common goal of not dwelling on Detroit’s past, but saying let’s grow the city of Detroit, in particular put an emphasis on the neighborhoods to bring them back to be a great place to live in our state. Let’s see Detroit keep continue going up and Mayor you have my support and partnership in helping make that happen. Thank you (EXTENDED APPLAUSE to 18:32)
Then at 40:30: To give you an update on something though is of interest to many people on the whole situation of emergency managers, since I’ve been governor we’ve had 11 different cities or school districts that have had an EM. I’m pleased to report six of them have left emergency manager status and we have a seventh on the way. The system is generally working well, but the point is let’s avoid emergency managers, let’s do early warning, and the other thing I’m calling for is we need to do a scorecard for all local jurisdictions and state jurisdictions about financial performance and performance in terms of objectives that’s easier for our citizens to use and to see. Let’s create this easy-to-use scorecard that our citizens deserve so we can be more accountable and transparent on how we’re operating and what our challenges are within government.
Detroit’s financial emergency is over, according to Gov. Rick Snyder and Emergency Manager Kevyn Orr.
The two men will be joined by Mayor Mike Duggan at an 11 a.m. news conference today to discuss the city’s exit from Chapter 9.
The special House Committee on Detroit’s Recovery and Michigan’s Future convened earlier this year to consider the so-called “grand bargain” bills related to the city’s bankruptcy. Today, the panel met again and passed along a bill to the full House that would allow municipalities to crackdown on land speculators and other property owners who are delinquent on property taxes.
Meanwhile, WDET’s Sandra Svoboda spoke with committee chair Rep. John Walsh (R-Livonia). Here’s what they said:
JW: One is really highly technical in nature. One of the bills that passed out of the committee back in May-June timeframe had some corrections that we needed to make so it’s appropriate to come back to the committee and do that. While we’re there, since I had to post for that, I have another bill that I’ve introduced that will address the issue of people who can bid on tax-foreclosed properties. We’re going to take up both bills up at the same time.
SS: What changes does the bill on tax foreclosures make?
JW: The bottom line simply is if you are attempting to purchase tax-foreclosed property at an auction, you cannot bid if you own other tax foreclosed property. So the cycle in Detroit, and I’m told in other jurisdictions, is that we have land speculators for lack of a better word, out trying to buy property, and maybe they make use of some of it and drop others. But there’s this cycle of people who have habitually abused this process, let their property fallow, failed to pay taxes, and then yet they’re bidding on other tax foreclosed property so the hope here is to gain a higher quality bidder, somebody that actually is going to not only honor their obligation on the purchase but to make tax payments on it moving forward.
SS: To what extent has the existing situation contributed to Detroit’s financial crisis or even the bankruptcy?
JW: In terms of the financial crisis it goes to that bottom line of who’s paying taxes in Detroit and who isn’t. Are properties falling fallow and into blight because people aren’t maintaining them, they’re dispensing of them. Finding responsible owners that can paying their taxes is the goal and I think ultimately contributes to the health of the city.
SS: What are you hearing from your fellow representative, are they in favor, do they have questions or concerns? What’s the mood on this bill?
JW: There have been no specific questions or concerns raised. People are waiting for the hearing to learn more. I just introduced the bill a couple of weeks ago but I do expect it to pass. I have spoken with committee members. They don’t have any questions pending testimony. Barring anything that is dramatic, I think we’ll be able to move the bill to the floor.
Detroit’s Financial Review Commission, created by the “grand bargain” legislation, holds its second meeting Friday. The agenda includes reviewing budget timelines and the city’s Plan of Adjustment. The panel also will discuss audit activities.
The nine-member group plans to meet at 9 a.m. in the Michigan Gaming Control Board Meeting Room at 3062 W. Grand Blvd. in Detroit.
At the commission’s first meeting last week, members adopted resolutions ensuring they will comply with the state’s Freedom of Information Act and Open Meetings law.
Member Bill Martin, one of the gubernatorial appointees, appeared on WDET’s Detroit Today program and discussed the commission, its work and how it will coordinate with city officials.
Detroit is moving closer to exiting bankruptcy which means the state financial review commission will have a role in monitoring the city’s operations. WDET’s Sandra Svoboda talked with City Council Member James Tate about what that arrangement means for Detroit. Here’s the interview, with a full transcript below.
JAMES TATE: The role of the city council post bankruptcy is really the same role we had pre bankruptcy. We’re the stewards of the taxpayers’ dollars. Now as a result of the bankruptcy and restructuring those billions of dollars, it has given us some cushion. Not cushion to have and play and have a great time with. But really to put toward those services that have been so desperately diminished over the years.
SANDRA SVOBODA: You’re going to have plenty of eyes on you as you proceed, specifically the Financial Review Commission that was part of the state legislation. Tell me about how that group will interact with the city council.
TATE: The financial review group, they’re going to basically provide that oversight. They’re not over the day-to-day operations as I mentioned previously, as the mayor and the city council, we’re still in charge of the city but we’re going to have to make sure we provide them with reports. Those reports are going to have to be vetted. That’s why it’s important to have – and I know it became somewhat of an issue with the judge — it’s important to have council president as well as the mayor on that team because they’re able to advocate and express clearly so there’s no ambiguity as to what those plans are and what we have in those budgets. If it were my choice, would we not have the group there? Absolutely. You want to be able to govern freely without having someone peeking over your shoulder. But ultimately we’re looking at this as making the best of the situation that we’re in.
SVOBODA: Do your colleagues on city council hold generally that opinion or is there more of a spectrum of support or opposition for the financial review commission or more opposition than you seem to have?
TATE: We really haven’t had that conversation, if others feel the same way as I do. When you start looking at the actions of this particular city council, this group is very realistic about looking at the situation that we’re in. We can scream and moan and complain about the fact that there is a financial review commission there. That won’t result in much but a lot of noise being made but I don’t think you’re going to have a lot of complaints about the situation because the reality is they’re here and I think the goal is to do everything we can to get the commission to no longer be here.
SVOBODA: Characterize for me what the bankruptcy process was able to change relative to the city council’s role that will prevent another financial crisis from happening.
TATE: It’s hard to say because there wasn’t one thing that created our financial burden that we were under, our financial stress, financial burden, financial crisis. It was a number of different things that took place. Ultimately the argument can be held that there are several layers of oversight that will ensure that not just city council but the city as a whole that the decision makers will not make those detrimental financial deals that will drag down the city.
SVOBODA: Do we have an exit date for Kevyn Orr and what will be the biggest change in the atmosphere or environment on that day?
TATE: I don’t have that date. I’m not sure what it is. We built into the final order that he would only be here to work on the bankruptcy. Now that we’re winding that down, he is no longer effectively running the city. I will say Kevyn Orr has been definitely a lot less heavy handed than many of the other emergency managers around the country. When he came in there was a big fear that he was going be like some of the others, I mean the state, excuse, he was going to be like some of the others where he would say “OK city government, move aside. I’ll take this.” I will say to his credit that he did work with us. He did not have the expertise when it came to the city as a whole. But I don’t think that we’re going to see very much in the way the city operates and functions. We’re here now. It’s the new normal. What you see today is a government that is focused on service, ensuring that our financial challenges no longer exist in the way as they did in the past. Not to say that because of the national economy, if it changes, even the state as well because we are at the bottom end of that totem pole. But I think with Kevyn Orr exiting, you won’t see much of a difference from where we are today.
As Detroit exits bankruptcy, a state Financial Review Commission will have authority to approve the mayor and council’s four-year budgets, approve sizeable contracts, approve collective bargaining agreements and report to the governor twice a year for the next 13 years. Bridge Magazine takes a look, before the panel’s first meeting today.