Detroit

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Detroit Emergency Manager Kevyn Orr proposed a new health care plan to the city’s 47 unions Friday morning, according to Reuters.

The plan will save the city $12 million a year by raising deductibles and trimming the number of plans available, but it will keep premiums the same.

Currently, there are 20 health care plans available to employees. Orr wants to reduce that number. Under his plan, single city workers will see their annual deductibles increase nearly fourfold -- from $200 to $750 -- and out-of-pocket expenses will be capped at $1,500. Married employees will see annual deductibles increase to $1,500, and out-of-pocket expense will be capped at $4,500.

Co-pays for doctor visits and prescription drugs will stay the same. The city will also continue to offer vision and dental plans. Preventive measures will still be free.

Orr said in a statement:

“We think this is the best plan we could propose given Detroit's financial crisis, but I look forward to hearing from union leadership on their ideas to lower healthcare costs. . . . The City’s plan holds the line on premium costs for employees while allowing Detroit to save enough money to put another 100 police officers or firefighters on the streets.”

The proposal is part of Detroit’s financial restructuring efforts to eliminate more than $18 billion in debt.

-Michelle Nelson, Michigan Radio Newsroom

The FBI has just completed a nationwide sweep resulting in the arrest of 150 pimps and the rescue of 105 children who had been forced into prostitution. We took a closer look at human trafficking in our state.

And, we spoke with Leigh Ann Ulrey, one of 30 college graduates to be selected for the Challenge Detroit program.

And, a new House bill could eliminate state income tax. State Representative Bob Genetski joined us to talk about why he thinks income tax is unnecessary.

Also, self-driving cars could be available to consumers within the next 2-3 years, according to Google. We found out what the future of transportation might look like.

First on the show, there was an important handshake this afternoon in Lansing.

UAW President Bob King shook hands with state government officials to officially launch the start of contract talks.

UAW Local 6000's contract with the state expires at the end of 2014. But the state needs to finalize the next contract by the end of this year in order to get it funded in next year's budget. Local 6000 represents 17,000 state employees.

Let's look at what the big issues might be in the negotiations.

Rick Pluta, Michigan Public Radio Network's Lansing bureau chief, joined us today.

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There’s been a lot of attention paid to the problem of Michigan’s brain drain, how to keep college graduates in Michigan, applying their talents and energies to issues and challenges that are here at home instead of heading out of state.

We discovered an intriguing program offering a strategy to keep tomorrow’s leaders in the state. It’s called Challenge Detroit. It’s a leadership and professional development program that’s currently in its first year.

Leigh Ann Ulrey was one of the 30 graduates chosen out of hundreds of applicants to be part of the 2012-2013 Challenge Detroit program. She is a culture community and diversity specialist at Compuware in downtown Detroit. She joined us today from the Compuware headquarters.

Listen to the full interview above.

user: The Ohio State University / Flickr

The FBI recently completed a national sweep that led to the arrests of 150 pimps and the rescue of 105 children who were forced into sex slavery. The sweep was called the Innocence Lost National Initiative.

There were ten children (as young as 13-years-old) rescued in Detroit and 18 arrests were made, which put the city in the number two slot in the national sweep's ranking.

Elizabeth Campbell, a staff attorney for the Human Trafficking Clinic at the University of Michigan, wasn't surprised by those numbers, even though they were higher than many of the cities that were included. 

"Every American community has this problem, this is just the tip of the iceberg. I'd like to believe that [higher numbers in Michigan] are because we have great cooperation with law enforcement, but we also have certain factors that have made us susceptible to such operations."

Michigan may be, in many ways, the most diverse state in the union. California and Texas are much larger. Alaska is out-of-the world vast, though fewer people live there than in Macomb County.

Clarita / MorgueFile

By now you’ve heard a bit about Detroit’s Chapter 9 bankruptcy filing. About half of Detroit’s nearly $20 billion in debt is due to shortfalls in the funds for retiree’s benefits. According to emergency manager Kevyn Orr’s estimates, the pension funds are behind by about $3.5 billion and behind in retiree health care funds by about $5.7 billion.

Detroit is not unique in its unfunded pension and retiree health care obligations. Other municipalities in the state are also behind.

Anthony Minghine is the chief operating officer of the Michigan Municipal League.  He joined us today.

Listen to the full interview above.

Sam Beebe / Ecotrust

An opinion piece caught our attention in the wake of the Detroit bankruptcy filing. The headline of the piece in the online magazine site Model D reads “Bankruptcy, the beginning of another opportunity.”

The author was Matthew Naimi, founder of the non-profit Recycle Here in Detroit. He describes bankruptcy as a chance to finally address the city’s dysfunction.

Naimi joined us today to discuss his piece.

Listen to the full interview above.

A Detroit police car
Steve Carmody / Michigan Radio

The Jefferson Corridor in Detroit is home to the Clean and Safe program.

The program was created in part by the organization formerly known as the Jefferson East Business Association (JEBA). JEBA recently merged with the East Jefferson Corridor Collaboration to form the Jefferson East Inc.

The program is aimed at reducing crime in the Jefferson Corridor by taking advantage of a special program that allows off-duty Detroit police officers to be hired during their off-hours. The officers are armed, uniformed, and use DPD squad cars, at no extra cost to taxpayers. Cops who have seniority and a clean record are eligible. 

Politicians are falling all over themselves in Washington and in Lansing to oppose spending any money to, as they put it, “bail out” Detroit.

Michigan's next Senator Gary Peters.
U.S. Representative Gary Peters

A half-dozen major transportation infrastructure projects are in the works for southeast Michigan, and Congressman Gary Peters wants to make sure local workers get the jobs that come along with them.

Peters convened a transportation jobs summit to push that objective Monday.

“If we’re bringing federal money into the state of Michigan, I want people from the state of Michigan working on those projects," said Peters. "And if the project is in the city of Detroit, then I want Detroiters working on those projects.”

Peters says those federal funds often come tied to thousands of local employment opportunities—but that doesn’t always work out.

Last week, Michigan Attorney General Bill Schuette did something many found startling, especially those politically liberal. Schuette announced that in Detroit's bankruptcy filing he intended to intervene on behalf of those who have pensions coming.

Bernt Rostad / creative commons

Detroit’s bankruptcy could impact many people’s daily lives, perhaps the city’s retirees most of all. At a banquet hall in Livonia this week the Detroit Retired City Employees Association held its annual luncheon. Over one thousand people attended. Many of them worry they may lose part or all of their pensions in the bankruptcy. 

Hear the worries, frustrations, and thoughts of retirees with close to 200 years of city service between them in their own voices below.  


Steve Carmody/Michigan Radio

A federal judge ruled this week that a lawsuit accusing investment banking giant Morgan Stanley of predatory lending in Detroit can move forward.

The lawsuit alleges Morgan Stanley pushed sub-prime mortgage lenders to target Detroit neighborhoods with large minority populations.

Morgan Stanley later packaged the ‘high risk’ loans into ‘mortgage backed securities’

Patricia Drury / Flickr

A group of Republican U.S. senators wants to prohibit the federal government from providing financial support to Detroit.

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The Detroit-Windsor Tunnel, the underwater highway that connects the U.S. to Canada, could be in trouble.

American Roads LLC, the privately-held company that operates the U.S. side of the mile-long border crossing, as well as four toll bridges in Alabama, has filed for Chapter 11 bankruptcy protection, citing low traffic as the cause, according to a report from Reuters.

The company is $830 million in debt and is seeking to restructure. Under their plan of reorganization, Syncora Guarantee, Inc. will become the tunnel’s new owner after the bankruptcy. The plan will go to the bankruptcy court in Manhattan on August 28 for approval.

Earlier this month, Windsor Mayor Eddie Francis told the Detroit Free Press that Canada would consider buying the tunnel if sold in bankruptcy:

“As long as the tunnel remains in the public interest, then the City of Windsor has no interest in the tunnel. However, if at that time there is a move to take the Detroit half of the tunnel, if it is put on the auction block or if it is being sold or disposed of in a way that is adverse to the public interest, then the City of Windsor will take steps to do whatever we can do to make sure it remains in the public interest.” 

American Roads' chief executive Neal Belitsky said in court papers that this is not a result of Detroit’s Chapter 9 bankruptcy filing last week, although that did not help. The company is blaming Detroit’s declining population for the reduced traffic.

During the bankruptcy process, tunnel operations will continue as usual.

-Michelle Nelson, Michigan Radio Newsroom

Bob Jagendorf / Flickr

There seem to be two types of stories emerging from Detroit these days: one bleak and one optimistic.

Both can be spun wildly out of proportion, but the two – seemingly contradictory – narratives paint the same city in a very different light.

Detroit’s bankruptcy has garnered attention from around the world – from the U.K. to India. The bankruptcy, the underperforming school system, the lack of public services, the high crime, the dysfunctional local governments: they all contribute to the bleak narrative.

At the same time, there have been a number of reports that have highlighted a more optimistic narrative in the city.

A recent boom in population and economic activity in Midtown and downtown has completely changed those areas of the city over the last several years.

With the historic Detroit bankruptcy filing, there has been much talk about money, about taxes, about shrinking revenue and rising legacy costs.

But two of our guests on Stateside today strongly believe all of those "dollar-based" conversations overlook one of the biggest reasons people leave Detroit and why people don't want to live in Detroit. And that is crime.

According to Emergency Manager Kevyn Orr's report to the city's creditors, Detroit's violent crime rate is five times the national average. And it takes Detroit police an average of 58 minutes to respond to a call, where the national average is 11 minutes.

Those harsh realities are just the tip of the proverbial iceberg.

How will these chronic, stubbornly high levels of crime affect Detroit's recovery and what can be done going forward to make Detroit a safer place to live and work?

Carl Taylor, Professor of Sociology at Michigan State University, and Jeff Hadden, the former deputy editorial page director for the Detroit News, joined us today.

Bernt Rostad / creative commons

Eventually, Detroit’s bankruptcy filing will be over. Eventually, Emergency Manager Kevyn Orr will no longer be in charge of Detroit’s finances.

When those things happen, Detroit will go back to being run by its city government, by a mayor, and a city council.

Daniel Howes, columnist at The Detroit News, focused on this future in his column yesterday in the News. He joined us today to discuss whether Detroit can shed its bad governance habits in light of the bankruptcy.

Listen to the full interview above.

Patrick Gibson / Flickr

While the first bankruptcy hearing for Detroit was underway, state economic development officials approved big incentives for developers to build a new sports complex in the city. The project includes a new hockey arena for the Detroit Red Wings. It would be within walking distance of the city’s football and baseball stadiums.

Michael Finney is the president of the Michigan Economic Development Corporation.

“Our job is to find every opportunity that we think will allow for more and better jobs and a future for our kids in this state, and this is one of those projects and it has every potential for a positive impact in Detroit,” he says.

The city’s downtown development authority would capture a share of local property taxes to help with public financing for the project.

user: jodelli / Flickr

In Detroit today, firefighters and police came out to watch the first day of federal bankruptcy hearings.

They know their pensions could be on the line.

Detroit’s pension funds are $3.5 billion short, according to the emergency manager.

So pensions will likely be slashed as the city tries to dig out of debt.

But some Detroit employees are filing to block the bankruptcy.

Capitol Building, Lansing, MI
Matthileo / Flickr

This week in Michigan politics, Jack Lessenberry and Emily Fox discuss the legality of Detroit's filing for bankruptcy, Judge Steven Rhodes and the first federal bankruptcy hearing today, and the fate of Buena Vista and Inkster school districts.

Patrick Gibson / Flickr

As Detroit moves into the process of Chapter 9 bankruptcy, one of the most powerful people in the city, arguably the most powerful person in the city, has become the judge to whom the case was assigned.

U.S. Bankruptcy Judge Steven Rhodes will preside over the largest municipal bankruptcy in American history, so many eyes from around the country will be trained on him.

We wanted to learn more about Judge Rhodes and for that, we turned to Detroit Free Press reporter Brent Snavely.

Listen to the full interview above.

OfficialTDShow / Youtube

Yesterday, The Daily Show’s John Oliver did a short feature on Detroit and the city’s bankruptcy. 

In a bit entitled "Chapter 9 Mile," Oliver takes a humorous look at the slow emergency response in the city and his lack of surprise that the Emergency Manager, Kevyn Orr (a bankruptcy lawyer) declares bankruptcy.

But jabs at the media make for the greatest laughs. Oliver points out the abundance of bad puns about the bankruptcy and the amount of reporting on Detroit that actually takes place in Chicago.

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In the last week, there have been a slew of worrisome reports coming out of Detroit, but here’s one that’s more optimistic.

Despite Detroit’s recent filing for bankruptcy, McCormack Baron Salazar, a developer from St. Louis, has proposed a $60 million project that would redevelop a stretch of the riverfront east of the Renaissance Center.

Today and tomorrow are anniversaries of two of the most important events in Detroit’s history, events almost never mentioned in the same breath.

Tomorrow it will be exactly three hundred and twelve years since a hundred Frenchmen scrambled up the riverbank, started cutting down trees, and establishing a fort they called Pontchartrain du Detroit.

There was an immense celebration of that anniversary a dozen years ago, a celebration virtually forgotten today. Nobody celebrates today’s anniversary, though we grimly discuss it.

User: Brother O'Mara / flickr

Buena Vista and Inkster school districts to be dissolved

The state is moving ahead to dissolve the Inkster and Buena Vista school districts. Both districts failed to meet a deadline yesterday to prove they could keep their doors open next school year. Now state officials say it could be a matter of days before the districts are dissolved, Michigan Public Radio's Jake Neher reports.

Protesters arrested at pipeline worksite

Enbridge energy is building a 285 mile pipeline across Michigan that will carry tar sands oil. The pipeline will replace the one that ruptured three years ago. Yesterday, protesters chained themselves to heavy equipment at a worksite southeast of Lansing. They say the new pipeline will present an environmental threat. Twelve people were arrested at a protest yesterday, Michigan Radio's Steve Carmody reports.

Will Detroit retirees see pension cuts?

A federal bankruptcy court will now be the scene for some huge decisions about the future of Detroit which filed for Chapter Nine protection last week. One of the key issues is whether retirees will see their benefits cut. Michigan Radio's Sarah Hulett has more.

On this Monday, July 22, four days after Detroit made history by filing for Chapter 9 bankruptcy, we spent the first half of the show breaking things down and figuring out where things stand in the nation's largest municipal bankruptcy ever.

And, we looked at what needs to be done to preserve and protect Michigan's rivers and lakes.

But, back to Detroit and what we know right now. A judge in Lansing will take a week to sort through arguments on whether the state Constitution protects Detroit’s pension funds from losses if the city goes bankrupt.

Ingham County Circuit Judge Rosemary Aquilina says she will decide next Monday whether Detroit's bankruptcy filing violates the state Constitution, and its protections for pension benefits.

Assuming the Chapter 9 bankruptcy goes forward, Detroit will have to figure out how to reduce billions of dollars of debt. Creditors, of course, will push for the most money they can get, which means they're eyeing some of the city's most valuable and treasured assets.

Peter Martorano / Flickr

In the days before and after Detroit filed for bankruptcy, you didn’t have to look too far to read and hear comments about Detroit that range from dumb to mean-spirited to outright vicious.

One has to wonder: Just why did actor Jon Hamm of AMC’s Mad Men have to take a shot at the city of Detroit while hosting the ESPY awards last week, talking about San Francisco beating Detroit in the World Series?

Why did a co-worker flying back to Detroit from an out-of-town visit hear the guys in the row behind her discussing the Detroit bankruptcy to be summed up by one man declaring, “I wish we could just dump Detroit into the lake. We’d all be so much better off.”

A Detroit Free Press reader commented “Way To Go Mo Town!!! We Knew You Could Do It!!! Now, Everybody Gets Nothing!!!”

And the Twittersphere has been mighty busy mocking the Motor City. Just check out #newdetroitcitymottos.

We wanted to go deeper into these attitudes. Would things like this be said, say, if it was Chicago or Atlanta having to file for bankruptcy? How far back does this scorn for Detroit reach? How much of this attitude permeates the halls of Congress?

We were joined today by Michigan Radio’s political analyst Jack Lessenberry and Todd Spangler from the Detroit Free Press Washington bureau.

Listen to the full interview above.

Michigan State University

No matter who is commenting or offering expert opinion on the Detroit bankruptcy, everyone seems to agree on the fact that this is "uncharted territory." And that's about all they can agree on.

Take the speed of the bankruptcy: you can find experts who predict a slow, tortuous process. And just as easily, you'll find predictions that Kevyn Orr will move this bankruptcy faster than anyone expects.

And, did Kevyn Orr and Governor Snyder have any other options to help Detroit back to financial stability?

And what does this all mean for other cities in Michigan and the state's economy?

So many questions, so many opinions. That's why we were very glad to welcome into the studio Eric Scorsone, economist with Michigan State University and an expert on the ins and outs of government finances.

Listen to the full interview above.

Photo courtesy of the DIA

Kevyn Orr is Detroit’s state-appointed emergency manager. And he has some pretty extraordinary powers to chart the course of Detroit’s potential bankruptcy—and its future.

Last Friday, Orr took questions from reporters. The very first question he faced was pretty much, ”What’s for sale?”

“Right now there’s nothing for sale, including Howdy Doody.”

Orr was actually referring to the Detroit Institute of Arts, whose collection includes the original puppet from the 1950s children’s TV show. Though no one knows for sure, the DIA’s total assets — which include masterpieces by Van Gogh and Picasso — could be worth about $2.5 billion.

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