Upon word of the DIA's $100 million commitment last week, the plan was heralded by the Detroit Free Press as a "a potential turning point in Detroit’s historic Chapter 9 bankruptcy, helping clear a path to a less painful and faster resolution to the bankruptcy."
Sounds sticky, no? That's probably because nearly half of the fund rides on approval from Lansing. Gov. Rick Snyder announced a $350 million pledge last month, a possible "tough sell," The Detroit News reported.
And wouldn't you know it, according to a survey released today by the University of Michigan, it could be an issue. Sixteen percent of respondents from cities, townships and villages across the state supported the idea of financial assistance for Detroit, while 57 percent said they were outright against contributing aid.
They're not state represntatives, but they indicate the likely prevailing sentiment about a possible
bailout settlement for Detroit.
But, by most accounts, the state's $350 million pledge seems to be taken as a given. Detroit Emergency Manager Kevyn Orr included it in the draft bankruptcy-exit plan he shipped to the city's creditors this week. Orr faces a March 1 deadline to submit a final version of that plan to the U.S. Bankruptcy Court in Detroit.
Senate Appropriations Chairman Roger Kahn called the pledge an "uphill battle" for Snyder.
"I don't enjoy disagreeing with the governor, or disagreeing with him publicly," Kahn told us Monday, "but I do think an awful lot of us are skeptical of the do-ability of that proposal."
Kahn says the issues are aplenty: Whether or not the state legislature would support the plan, whether it would achieve the desired goal of "protecting the DIA" if Judge Steven Rhodes, who's overseeing Detroit's bankruptcy case, would approve the plan, and, if any safeguards would be built into the proposal to prevent a similar incident in the future.
"It's a moving target," Kahn says. "I have a responsibility ... to listen and vet the idea ... and I’ll try to do it fairly."
Douglas Bernstein, the area's de facto municipal bankruptcy expert, says Orr could submit the bankruptcy-exit plan that's been circulated to creditors by the March 1 deadline, but it'll likely be amended, "and that's not unusual."
"But before it gets confirmed, [Orr is] going to have to demonstrate that the money’s real and it’s there," Bernstein says. "'Cause in order to get a plan confirmed, he has to demonstrate capability."
Considering everyone, including Orr, appears to believe Detroit City Council will vote to remove him in September, the expedited timeline puts pressure on everybody, Bernstein says.
"That's not a bad thing, necessarily," he says. "It increases the stress level."
We welcome readers to submit letters regarding articles and content in Detroit Metro Times. Letters should be a minimum of 150 words, refer to content that has appeared on Detroit Metro Times, and must include the writer's full name, address, and phone number for verification purposes. No attachments will be considered. Writers of letters selected for publication will be notified via email. Letters may be edited and shortened for space.
Email us at email@example.com.
Support Local Journalism.
Join the Detroit Metro Times Press Club
Local journalism is information. Information is power. And we believe everyone deserves access to accurate independent coverage of their community and state. Our readers helped us continue this coverage in 2020, and we are so grateful for the support.
Help us keep this coverage going in 2021. Whether it's a one-time acknowledgement of this article or an ongoing membership pledge, your support goes to local-based reporting from our small but mighty team.
Join the Metro Times Press Club for as little as $5 a month.