Retirees Split On How Detroit Bankruptcy Deal Affects Future
DETROIT (WWJ) -- Judge Steven Rhodes approved Detroit's plan to get out of bankruptcy -- ending the largest public filing in U.S. history -- on Friday.
Part of the plan is to cut the pensions of general retirees by 4.5 percent. Russ Bellant, a retired supervisor from the Detroit Water Department, spoke with WWJ just after Rhodes approved the plan.
"One of the things that I and many other retirees are painfully aware of is that of the $7.1 billion settlement, 80 percent of it coming from retirees," Bellant said.
Some retirees say that they are worried that the city could fall into debt and file for bankruptcy again.
"For retirees it looks like a transfer of retirees' benefits and compensation, which were earned and protected by the Michigan Constitution and being transferred to by bonds for new projects," Bellant said.
Scott Dickinson, a retired Detroit police officer, was involved in a shootout in 1974 which left two officers dead and three others wounded. Dickinson said that he is pleased with the bankruptcy plan.
"I earned my pension that day," Dickinson said. "We're not actually losing any pension money. In reality, my net check -- the money that's deposited every month in my bank account -- will not decrease."
What officers are giving up are cost-of-living increases for the future.
"The city still has to live up to their bargain," Dickinson said. "If you want my personal opinion, it didn't live up to the first bargain."
John Pottow, law professor at the University of Michigan, says changes are being made to prevent that from happening.
"They'll have different pension obligations and so they won't get themselves into the same mess again," Pottow said. "They're setting up financial oversight structures to make sure basically they do start spending themselves into a deficit hole again."
Pottow said that the deal also calls for $1.5 billion in spending on police, fire and the tearing down of abandoned homes to help the city's resurgence.
Gov. Rick Snyder says Detroit has emerged from bankruptcy a stronger city.
"I'm pleased to say today is a historic day in a positive sense for the city of Detroit," Snyder said. "The city has a bright future, and it was because of the hard work of so many people."
