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Fri June 20, 2014
Snyder signs Detroit rescue package, stresses city’s recovery
Gov. Rick Snyder has signed legislation that authorizes the state’s $195 million contribution to the Detroit bankruptcy settlement. The governor says the settlement is a good deal for taxpayers because it sets the stage for the city’s comeback.
Gov. Snyder called Detroit’s bankruptcy the “darkest chapter” in the city’s history. But he 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 as the audience applauded.
The governor chose the shuttered 122-year-old Globe Building in Detroit as the location for the bill signing. The former factory, where Henry Ford worked as an apprentice machinist, is being refurbished as a state park visitor center.
The governor told the crowd gathered that the state’s donation to the settlement is a critical – but not the final – step.
“So this is a moment to sign these bills and celebrate, but what I would say is this is a story that is not over. So, while we celebrate today, let us recognize there is still more work to be done.”
The governor was referring to the fact that Detroit pensioners must still approve the deal. The deal asks them to give up their right to file legal challenges to the settlement. In exchange, pension benefit cuts would be less severe. Otherwise, they’d have to take their chances in court.
The voting is supposed to be over next month, in time for the city’s bankruptcy trial to begin in August.
Businesses and foundations have also made big contributions – adding up to more than $800 million.
Detroit Mayor Mike Duggan was among those who attended the signing ceremony. He said this is a necessary step to mitigate the human cost of the bankruptcy. And he praised the bipartisan support for the rescue package.
“What you have done with this bill is give us a fresh chance and I think in the coming years it’s going to turn out to be one of the most proudest things you did in your political careers.”
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 the hundreds of millions donated by businesses and foundations, will be used to mitigate cuts to pension benefits in the bankruptcy process.