Committee on Detroit’s Recovery and Michigan’s Future hears from bill sponsors

Categories: News

 Members discuss appropriations, oversight,
pension management, DIA millage and more

Chair John Walsh, R-Livonia, and colleagues presented information about an 11-bill package on Detroit’s bankruptcy settlement before the committee on Detroit’s Recovery and Michigan’s Future today. Numerous groups testified before the committee, including organizations representing Detroit businesses as well as unions and public service associations.

“If all stakeholders contribute to solving the challenge before us, Detroit can return to being an economic engine as we all continue driving Michigan forward,” Walsh said. “That being said, our job in the House is to propose solutions, receive feedback, deliberate further and hopefully make some very positive changes to the legislation in order to make the most of this opportunity to get Detroit back on its feet.”

The state is a strong force in negotiations with the city because accountability is key when using taxpayer dollars, Walsh said. The 11-bill package as a whole sets legal boundaries that require prompt reform and long-term accountability from Detroit, which is to ensure the proper use of state funds.

“Many of the stipulations that come with state money are strict by design,” Walsh said. “We have a duty to the people of Michigan to use their money wisely as well as protecting and resurrecting Detroit as one of our state’s most precious assets.”

Though likely to see amendments, the legislation will appropriate $194.8 million to a new Michigan Settlement Administration Authority, which will oversee the proper use of funds. Revenue from the tobacco settlement fund will be distributed to the budget stabilization fund over 20 years to repay the withdrawal. Walsh’s bill, HB 5566, establishes an oversight committee accountable for Detroit’s fiscal responsibility, which go dormant as the city meets a set financial criteria and will be automatically revived upon falling below said criteria.

Additional bills in the package stipulate the hiring of a chief financial officer, annual adoption of a 4-year financial plan, estimation of revenue modeled after the state’s conference, and reforming and managing pensions, including requiring cost-sharing on health-care premiums and transitioning new city hires to 401k contribution plans. An Investment Committee would also be established to recommend prudent pension fund investments according to law and prohibit improper use of travel funds for board members.

“Michigan is a strong state with astounding economic potential,” Walsh said. “We are choosing to help Detroit and all of Michigan overcome this challenge and get out from under the raincloud. It’s the right choice that will save taxpayers millions down the line.”

The final bill in the package allows the current millage for the Detroit Institute of Arts to be preserved though its original 10-year millage, but not renewed or extended as a means of encouraging the organization to become a standalone 501c3 nonprofit in the future, separate from all government entities.

The final committee meeting of the week invites public comment and will be after session on Thursday, May 15. The public is welcome to submit requests for written and oral testimony by emailing Rep. Walsh’s office at JohnWalsh@house.mi.gov. The committee will hear a special presentation next week at 10:30 a.m., Tuesday, May 20, from Richard Ravitch, who worked on similar legislation during the New York City bankruptcy.

Both meetings will be held in House Appropriations, Room 352 at the state Capitol in Lansing. They also will be live-streamed online by House TV at house.mi.gov for those unable to attend. More information on the 11-bill package can be found at gophouse.org.

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Detroit Committee Members, May 13