The special House Committee on Detroit’s Recovery and Michigan’s Future is holding its fourth hearing today on the 11-bill package to provide funding and oversight for Detroit post-bankruptcy.
On today’s agenda: Detroit Mayor Mike Duggan, City Council President Brenda Jones, State Rep. David Nathan (D-Detroit) and Richard Ravitch, former lieutenant governor of New York and the bankruptcy court’s special expert witness in the Detroit case.
Watch it live here:
The Michigan Building and Construction Trades Council will contribute money toward the “grand bargain,” federal court mediators announced late Monday. The Council, a statewide coalition of dozens of trade unions, becomes the first labor group to commit cash toward funding Detroit’s pensioners as House Speaker Jase Bolger (R-Marshall) called for last month.
The Council, organized into nine districts covering Michigan, is a coalition of building and construction trade unions. The Greater Detroit Region lists more than two dozen member unions ranging from Asbestos Abatement Workers to Teamsters.
The mediators’ statement did not include a dollar figure but said the Council would make “material contributions toward health care costs for Detroit’s Retirees.” When the city filed for bankruptcy last year, its obligations for post-employment health care and other benefits were estimated at $5.7 billion to $6.4 billion. The city’s current Plan of Adjustment and agreements with some employee and retiree groups includes moving health care administration to Voluntary Employee Benefit Associations.
The mediators said “it is hoped that other labor organizations will soon come to the table ad support this effort to assist Detroit’s retirees in meeting their health care costs.”
Bolger, who released a statement shortly after the mediators, also did not offer any details of the Council’s contribution or other terms of the support. “Detroit’s recovery will require all hands on deck, and I am grateful to see these union organizations stepping forward to take a seat at the table,” he said. “This leadership is important as the full picture of the plan for Detroit’s success continues to comes into focus.”
The special House Committee on Detroit’s Recovery and Michigan’s Future is having a fourth day of hearings May 20 that is to include Mayor Mike Duggan’s testimony on a package of 11 bills to provide the state’s share of the “grand bargain.” A dozen philanthropic groups have pledged $350 million toward the plan while the Detroit Institute of Arts has agreed to raise $100 million. In order for the city to receive the $816 million from the grand bargain, retirees must approve the city’s Plan of Adjustment during voting over the next seven weeks.
Here is the federal mediators’ statement:
State, foundation and Detroit Institute of Arts funds are all part of the so-called “Grand Bargain,” a key and as-yet unfinalized piece of the city’s financial restructuring in the bankruptcy case. Here’s a way to help understand the grand bargain.
As Emergency Manager Kevyn Orr and Gov. Rick Snyder worked this week to convince lawmakers to help fund Detroit’s pensions and protect the Detroit Institute of Arts’ collection, the Michigan chapter of Americans for Prosperity weighed in about the proposal.
Don’t do it, the conservative group said, as reported in MLive.
The conservative group, which has ties to the powerful Koch brothers, expressed its opposition in a letter to lawmakers and launched a new “don’t bail out Detroit’ website encouraging taxpayers to do the same.
“Time and time again, Michigan has rewritten its laws to give Detroit special treatment and more financial assistance,” AFP state director Scott Hagerstrom said in a statement. “Yet all this help seems to have encouraged not corrected bad behavior. Another state bailout will not fix Detroit’s problems.”
But The Detroit News, while giving merit to House Speaker Jase Bolger’s suggestion that unions representing city workers should pitch in, urged the Republican lawmaker to drop that proposal and allow a vote on the grand bargain. The News’ argument was based upon, in part, the belief that Bolger doesn’t have “time to amend a deal” that is scheduled to be sent out for a vote in less than two weeks.
To think he can do so now, with the deal all but set and the bankruptcy entering a critical final stage, is unrealistic.
Meanwhile, the Detroit Free Press reports that Orr plans to return to Lansing next week when the Republicans will be crafting bills with the appropriation for Detroit.
Our DJC partners at Detroit Public Television have another Detroit-focused MiWeek program. With guest co-host Nancy Kaffer from the Detroit Free Press, the team talks about this week’s negotiations regarding the $350 million needed from the state to seal the grand bargain for Detroit’s bankruptcy. Also, they analyze the anger over the state’s policing of Belle Isle. If you missed the broadcast, we’ve got it online.
Seeking support for the state’s share of the “grand bargain,” Emergency Manager Kevyn Orr is in Lansing today meeting with lawmakers.
The “grand bargain” includes the $100 million pledged from the Detroit Institute of Arts and the $366 promised from foundations to shore up pension funding and protect the museum’s collection from sale to raise money to pay the city’s creditors in the bankruptcy case. The city’s plan to emerge from bankruptcy includes $350 million of state money as part of the bargain and requires pensioners to vote in favor of the plan as part of the bankruptcy court process.
Since Gov. Rick Snyder proposed the $350 million state contribution earlier this year, the boards of the city’s pension systems have agreed to settlement terms with the city and the foundations have released their commitments. What remains is the state appropriation, and that’s what Orr is hoping to help secure this week.
He’s in meetings throughout today and tomorrow with party-specific groups of legislators and the governor. If you’re looking for instant coverage, here are the Twitter handles for some of the reporters working up there today:
@RickPluta, reporter/producer for the Michigan Public Radio Network
@KathyGray, political reporter for the Detroit Free Press
@ChadLivengood, capitol reporter for The Detroit News
@ChrisGautz, capitol correspondent for Crain’s Detroit Business
“Keeping your audience abreast of a complex financial deal is hard work,” The Detroit News writes today, continuing,
Detroit Institute of Arts director Graham Beal puts his shoulder to this in his latest letter in the museum’s online newsletter. It meticulously reviews the terms of the proposed “grand bargain” in Detroit’s bankruptcy, and then rebuts some critics even as it airs some of the museum’s own complaints about its predicament.
The city’s Plan of Adjustment assumes not only that the DIA will raise and contribute $100 million toward Detroit’s pension funds but that the state will chip in $350 million over 20 years to go along with a $365 million commitment from a group of foundations.
See what DIA Director Graham Beal is telling members…and the world about the deal.