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Thu January 23, 2014
Odds are against Snyder's attempt to save Detroit pensions and art
There was a lot of rejoicing yesterday at the news that the governor had signed on to a so-called “grand bargain” to help save the collections of the Detroit Institute of Arts.
Detroit is, of course, going through bankruptcy.
Creditors want as much as possible of the money owed them. Those counting on city pensions want to make sure they get their money, even if the DIA’s world-class collections have to be sold.
Selling the art would be devastating not only to art lovers, but it might deal the city a cultural blow from which it could never recover.
Given all this, a coalition of foundations has raised pledges of $330 million to help shore up pension funds, on one condition: that the final bankruptcy settlement prevent any art from being sold.
The DIA, in other words, would be left intact.
Three hundred million plus, unfortunately, is a drop in the ocean when you consider that the city and its pension funds are billions in debt. The state was called upon to help. Yesterday, Gov. Snyder responded.
He wants the state to add to the effort by committing $350 million to the pension funds, quote “to help minimize pension cuts, to help protect art.” For those of us who cannot imagine life without the DIA, this was gratifying.
But now for the cold shower: There are more strings attached to this than at a puppet show.
And even though the governor made this announcement with the Republican leaders of the House and Senate, there is no guarantee they are going to be able to deliver the votes to pass this. In fact, I think the odds are very much against it.
There is little love for Detroit among legislators from outstate Michigan, especially Republicans. There is even less enthusiasm for anything that sounds like a bailout.
The governor took great pains yesterday to say this wasn’t a bailout, but that’s what it looks like. Consider this: Everybody from Escanaba to Ecorse has a stake in repairing our atrocious roads.
But last year, the governor totally failed to get these lawmakers to appropriate the money needed for road repair.
Now, he expects them to ante up to help Detroit pension funds and art?
For many GOP lawmakers, supporting this would be inviting a Tea Party challenge in an August primary. By yesterday afternoon, some were already denouncing the deal.
Even if that could be overcome, consider this:
The fine print on the governor’s offer says the state would only provide this money as part of a settlement of the entire bankruptcy, and that retirees and city worker unions would have to sign on to the deal. And some are still fighting the bankruptcy itself.
I think the best thing would be for U.S. Bankruptcy Court Judge Stephen Rhodes to rule that the DIA is off the table in any proposed settlement, since the art and the institution are not solely a city asset.
Indeed, he seemed to hint at that yesterday.
Still, it would be nice if that money on the table could be added to the city’s troubled pension funds. My guess is that this saga is far from over, and that many twists and turns lie ahead.
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