Detroit’s finances would be under the scrutiny of an appointed board for as long as 20 years after the city’s bankruptcy under a new package of bills before the Legislature.
The bills outline the state’s role and its conditions for committing almost $200 million dollars from the state’s “rainy day” savings to Detroit’s bankruptcy settlement. That money would help preserve retiree pension benefits, and ensure the assets of the Detroit Institute of Arts aren’t auctioned off as part of the bankruptcy.
State Representative John Walsh (R-Livonia) chairs a special committee that’s crafting the legislation. He says the financial review panel is a critical part of the plan.
“We seriously do not wish to be in the day-to-day operations of the city, but we do want to assure that taxpayers that we’re keeping an eye on the money that we’ve put in there and trying to make sure that the city doesn’t fall back into trouble again,” he said.
The oversight panel would be named by the governor, legislative leaders, the Detroit mayor, and others to step in if and when they see signs of financial trouble in the city.
State Representative Harvey Santana (D-Detroit) says some of the city’s lawmakers are already pushing back, but he supports the idea.
“We would be in our best interest to make sure we have an extra level of security to make sure the money that’s being circulated in the city of Detroit is being managed correctly,” he said. “I don’t think anyone that there’s anyone out there with an ounce of logic or sanity that would disagree with that.”
The legislation also requires Detroit to hire a chief financial officer and hold formal hearings to determine how revenue the city has to spend. It does not mention House Speaker Jase Bolger’s condition that unions dip into their bank accounts as part of the bankruptcy settlement.
The first hearing by the House Detroit’s Recovery and Michigan’s Future on the legislation is expected next week, possibly Tuesday.
