As we’ve reported, the so-called “grand bargain” isn’t considered so grand by many people. Here, our Detroit Journalism Cooperative partner The Michigan Citizen opines about why the deal isn’t so great, calling out city council members and Detroit legislators for their support. “This governor put Orr and Orr’s former law firm Jones Day in place to push Detroit into bankruptcy, strip retirees of health benefits, threaten retirees to vote their way, take a portion of retirees’ pension; and redirect every viable asset of the city so it is under control of some authority — not the people’s duly elected representatives. … But when the people have representatives like Spivey and Sheffield, Stallworth and Durhal —who are happiest doing the governor’s dirty work — the people really haven’t got much.” Read more here.
It’s been almost six months since Mike Duggan took over as mayor of Detroit. He took over a city however, run by someone else: state-appointed Emergency Manager Kevyn Orr. Still, Michigan Radio reports as part of the Detroit Journalism Cooperative, that doesn’t mean Duggan has been denied all the rites of passage of the job including the schlep to Lansing to ask the state Legislature for something. Every mayor has to do it. And Duggan had to go to Lansing with a really big ‘ask.’ We’re talking about the $195 million dollar rescue package for his city (that’s right, ‘rescue,’ ‘settlement.’ Just don’t call it a ‘bailout.’) Here’s more.
Gov. Rick Snyder has signed the legislation that authorizes the state’s $195 million contribution to the Detroit bankruptcy settlement and creates additional oversight of the city’s finances and operations. The governor called the settlement, part of the “grand bargain,” a good deal for taxpayers because it sets the stage for the city’s comeback.
“This is about how not just Detroit but the spirit of Michigan came back,” Snyder said at the signing, held at the Globe Building near the Detroit Riverfront, which is under construction to become a Department of Natural Resources recreation center. “While we celebrate today, let’s recognize that there’s more work to be done.”
The governor said the day Detroit filed bankruptcy could be the “darkest chapter” in the city’s history, but the Governor says the taxpayer donation shows the entire state is behind the Detroit recovery effort. “Detroit, Michigan, means something special. It’s not Detroit versus Michigan or Michigan versus Detroit. It’s Detroit, Michigan, and we should hold our heads proud,” he said to applause.
There are conditions attached to the state contribution– including a commission that will supervise Detroit’s contracts and finances for years into the future. The money, along with hundreds of millions donated by businesses and foundations, will be used to mitigate cuts to pension benefits in the bankruptcy process. But pensioners still have to approve the deal. In exchange, they’d give up their rights to sue for their full benefits or other related issues.
“A ‘yes’ vote from pensioners is a vote for their own well being,” he said, “and the continuation of a message that is greater than bankruptcy.”
House Speaker Jase Bolger (R-Marshall) said the Legislature’s passage of the “grand bargain” bills represented how connected the state was in helping Detroit. “We may come from different peninsulas, but as we stand here today, we are all one Michigan,” he said.
Senate Majority Leader Randy Richardville, (R-Monroe), who showed off his made-in-Detroit Shinola watch, said one of the reasons providing state funding for Detroit’s pensions was important was because city workers live throughout the state “in all 83 counties.” (Here’s a map of where they live)
Rep. Thomas Stallworth (D-Detroit) said the city’s bankruptcy, in part, represents failure on the part of political leadership for the people of Detroit. He urged pensioners to vote “yes” on the Plan of Adjustment, saying it represents the “best possible deal for the city.”
Detroit Mayor Mike Duggan echoed the themes of voting yes, bipartisanship and “coming together.” He said, “What you have done with this bill is give us a fresh chance,” and it “will turn out to be one of the proudest things you’e done.”
As he did last week at the news conference at the Detroit Institute of Arts where the Detroit Three automakers announced their $26 million contribution to the “grand bargain” , U.S. District Chief Judge Gerald Rosen spoke. He is considered the architect of the “grand bargain” and has led the mediation efforts in the bankruptcy case.
“This is leadership, not just bi-partisan, but the three branches of government coming together,” Rosen said. “This isn’t a final victory lap. We’ve got a couple more laps to run.”
Also as he did last week, Rosen lauded Don Taylor and Shirley Lightsey, who head up police/fire and non-uniform retiree groups respectively.
Lightsey spoke directly to pensioners, saying “If you let that (grand bargain) money go and it’s off the table, you will have no sympathy from anyone. … Think about your decision. This is something you are going to have to live with.”
Lightsey also repeated her phrase that has been printed on buttons worn by some in the crowd of about 200. “We can’t eat principles, and uncertainty does not pay the bills.”
-By WDET’s Sandra Svoboda and Michigan Public Radio Network’s Rick Pluta
Here’s audio of Rick Pluta’s report.
“The positive spin is that they have satisfied one more requirement for confirmation of the plan,” says Laura Bartell, Wayne State University Law School professor and bankruptcy specialist.
In the five-page filing, Schuette writes that the grand bargain is legal and that its provision transferring the Detroit Institute of Arts collection to a nonprofit “to be held in perpetual charitable trust” is also consistent with Michigan law.
“This result — a result made possible through the generous contributions of local and national foundations, the DIA and the State of Michigan — is an excellent one,” Schuette wrote in an accompanying letter to Judge Steven Rhodes.
Last year, after questions were raised about whether artwork could be sold to pay city debt, Schuette issued an opinion that the museum’s collection could not be “sold, conveyed or transferred to satisfy City debts or obligations.”
That hasn’t stopped some creditors. Bond insurer Syncora continues to advocate for the sale of the art. If that happened, per bankruptcy procedure, the funds raised would be split between all the city’s creditors. Schuette has asked Judge Rhodes to quash Syncora’s subpoena, and a hearing on that issue is scheduled for June 26.
Meanwhile, the terms of the grand bargain bring in about $661 million from the state, foundations and other organizations and individuals to help fund the city’s pensions and protect the artwork from sale. But the grand bargain also requires pensioners to approve the Plan of Adjustment, which prescribes cuts to some pension payments, increased health care costs and other hardships for the 32,000 pensioners.
Voting concludes July 11.
“Less than a year ago, Snyder pushed Detroit into bankruptcy. Now he’s an unlikely driving force rallying the rest of the state to help this overwhelmingly Democratic city back on its feet,” The Washington Post observes. “It’s not unusual considering that Snyder, 55, has become one of the most hard-to-pin-down Republicans in the country.”
The politics surrounding Detroit’s bankruptcy in the city and the state capitol haven’t gone unnoticed by local columnists, reporters and politicos. But this week, The Washington Post took note. Calling him a unique Republican, the Post reviews several of the governor’s initiatives, with a large focus on his Detroit-related efforts. The Post finds some of them are seemingly at odds with the usual Republican party platform:
Like some other GOP governors, Snyder has signed controversial right-to-work legislation preventing unions from requiring workers to pay dues — a crushing defeat for organized labor in a state that was once a hub of union power. Working with a GOP-controlled legislature, he also has cut unemployment benefits and slashed business taxes while imposing a new tax on pensioners.
But unlike many Republican governors, he pushed to expand Medicaid and is encouraging immigration of high-skill workers. He vetoed legislation requiring voters to have government-issued identification. And while Snyder forced Detroit into bankruptcy, he has become perhaps the most influential advocate for an aid plan to put the city back on sound financial footing.
The Post notes only 5 percent of Detroiters casting gubernatorial ballots in 2010 did so for the “one tough nerd.” But that hasn’t lessened his interest in the city’s restructuring. The Post writes Snyder has “earned grudging praise” from some Democrats in Michigan.
November — and history — will show how deserved that is.
Shortly after the Michigan Senate passed the “Grand Bargain” legislation, Annmarie Erickson, chief operating officer of the Detroit Institute of Arts, spoke with WDET. While the House passed a measure that would have restricted the museum from seeking renewal of its operating millage, a Senate committee declined to send that bill to the full chamber for a vote.