Michigan Senate Approves 'Grand Bargain' Legislation

LANSING (WWJ/AP) - Michigan's Senate has approved spending $195 million to help shore up Detroit's pension funds, a key legislative step in a deal designed to end the largest public bankruptcy in U.S. history. That clears the way for Gov. Rick Snyder, who supports the plan, to sign the bills soon.

Snyder said during the press conference that he will sign the bills addressing the financial aid package for Detroit, after the normal review process, within a day or two.

The Republican-led Senate voted 21-17 to contribute state money to join commitments from 12 foundations and the Detroit Institute of Arts. The pool of money would prevent steeper cuts to retiree pensions, while the city-owned art museum and its assets would be shielded from being sold in the bankruptcy case.

Republican Senator John Walsh from Livonia presented the package of 11 bills to a Senate Committee, saying that saving Detroit would speak volumes to businesses around the world.

"When they think of Michigan they think of Detroit and if we can help with this city unto a proud path and recovery ... it is my opinion, that it will help the entire state," said Sen. Walsh.

Several leaders from Lansing and Detroit made statements immediately following the passage of the financial aid package for Detroit.

Statement from Mayor Mike Duggan:

"Today's vote by the Senate to approve $195 million in financial aid for the city of Detroit will help us honor the contract we made with our city retirees. We all owe a debt of gratitude to Senate Republican Leader Randy Richardville and Democratic Leader Gretchen Whitmer for their leadership on this issue. The kind of bi-partisan support we are seeing in Lansing right now is a clear sign of a new beginning for the city of Detroit."

Michigan Republican Party Chairman Bobby Schostak issued the following statement:

"Today is a landmark day in Detroit's history. Our elected leaders in Lansing worked together to deliver a fresh start to the city, and Michiganders across the state are celebrating this momentous accomplishment. This is the opportunity Detroit needs to be the beacon of success we all know it can be, and we applaud our Legislature for taking the bold steps necessary to make this possible. A strong Comeback City makes for a stronger Comeback State, and we can be proud of the direction we're heading together."

Business Leaders for Michigan, the state's business roundtable, applauded today the passage of legislation in the Michigan Senate to facilitate Detroit's exit from bankruptcy and responded with this statement to WWJ:

"The 9-bill package of legislation provides a significant contribution to the comprehensive financial restructuring plan for Detroit and the establishment of a financial oversight process to ensure the maintenance of sound fiscal practices that will improve city services."
Doug Rothwell, President & CEO, applauded the passage, "This package will help continue the momentum, progress and cooperation building in Detroit by helping the city get through the largest municipal bankruptcy in history in sound fiscal condition. Senate Majority Leader Randy Richardville and Senator Gretchen Whitmer provided tremendous leadership in securing passage of this important legislation. "
Rothwell further explained, "Detroit is critical to Michigan's turnaround. This legislation allows for meaningful and positive change to occur in our state's largest city. When it comes to Michigan's turnaround, we are all Detroiters now."

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Following more than an hour of testimony, a Senate panel approved nine bills, but failed to vote on the one bill that would prohibit the DIA from getting a millage renewal in 2022.

WWJ's Lansing Bureau Chief Tim Skubick said while the package was expected to pass the Senate ... there was still hesitation among some lawmakers.

"Senator Jack Brandenburg, a conservative from Macomb County, said he's voting no and interestingly the President of the Police Officers' Mark Diaz says his group is voting no on this package as well," said Skubick.

Tuesday afternoon the Detroit Bankruptcy Mediators announced that the Skillman Foundation will contribute $3.5 million to offset health costs for retirees.

Gary Brown the chief compliance officer with the city of Detroit appeared before members of Detroit City Council urging them to vote on a resolution in support of the Grand Bargain in the terms of the deal - to protect the art at the DIA.

"I think it could only help the effort if the council has already approved it - although - the council was up in Lansing - the full body was there in support of this, as well as on Mackinac Island in support of this. So I think the Senate knows that the council supports that by them approving a resolution in support, I think it would be helpful," said Brown.

This puts the amount of foundation money tied to the Detroit bankruptcy plan at $370 million.

In May, the DIA released a statement in support of the Grand Bargain but raised objections to Detroit creditors' demands.

And some city of Detroit retirees have been outspoken in their objections to Emergency Manager Kevyn Orr's plan of plan of adjustment - saying the cut to pensions is too much.

The GOP-controlled House approved the legislation about two weeks ago. A spokeswoman says Snyder will sign it "as soon as possible" after a required technical move by the House.

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