The moves would essentially go like this: federal money granted to Michigan for blight removal would head to Detroit and replace already-budgeted city funds for that effort, allowing those monies to go toward pensions.
That’s according to a Detroit Free Press article this morning under the headline “Obama, Michigan in talks to free up $100 million to aid Detroit pension deal.” Quoting sources speaking on the condition of anonymity, the Freep reporting team outlines how the funds would get from Washington into Detroit neighborhoods and/or pension funds, depending on how closely you’re tracking each dollar in the trade.
Officials from the Obama Administration, the Freep says, have been in discussions with key state figures. But:
Obama, not keen to set a precedent of the federal government sending money to cities or states with deep pension debts, has publicly said there’s no support for a bailout of bankrupt Detroit. But Obama also has been under pressure from unions not to let retirees suffer in Detroit, a city that votes heavily Democratic.
Sure, this story has some future forecasting, but at least in this case it has to do with funds coming into the city. While Detroiters live sometimes live under a “promises made, promises broken” cloud based on past history, perhaps this particular Freep story is more of an accurate forecast of the city’s next chapters. The time may be right for more commitments from Washington D.C. to spread some of its relative wealth into beleaguered municipalities like Detroit.
The four major deals reached by Emergency Manager Kevyn Orr and his team of attorneys in the past week with different city creditor groups must be reassuring to anyone watching for signs of future stability and the city’s ability to properly and prudently spend funds. Those deals are the commitments from three insurers of Detroit unlimited general obligation bonds, the deal approved by Bankruptcy Judge Steven Rhodes that reduces the city’s obligation on some pension debt, and yesterday’s announced agreements with the leadership of both pension groups for relatively minor cuts to payments in those systems.
Maybe the next announcements will be just that: who’s next to help.
-By WDET’s Sandra Svoboda
@WDETSandra and email@example.com