Consent Agreement is a shameful betrayal of citizens
By Sen. Bert Johnson
As legislators, sometimes one option is bad, but another is worse. Sometimes circumstances dictate our decisions rather than our own feelings or intuition. As I made clear to the Detroit City Council before their vote to approve Gov. Rick Snyder’s consent agreement, this was not one of those instances. Not only was approving the agreement unnecessary, it was a total abdication of responsibility to the residents of the city of Detroit.
Five members of Council voted in favor of the consent agreement and did Detroit a great disservice. As approved, the agreement comes with virtually no guaranteed revenue for our cash-strapped city. The little money that is included has already been appropriated — meaning the five members were sold a misleading bill of goods. This is a dream come true for anti-Detroit Republican legislators in Lansing. One Republican was quoted in the Detroit Free Press saying, “I’m glad they got the consent agreement, but I’m a ‘No’ on any additional money for Detroit, period.” The Republican House Appropriations Chair has expressed similar sentiments, solidifying their position. They have the upper hand, because Detroit is now under their thumb.
It did not have to be this way. As I clearly stated, rejecting this agreement would force the governor to acquiesce to Detroit’s needs. Those same Republican representatives, spouting off about their “no” vote positions, would be forced into “yes” positions, because a bankruptcy filing for Detroit would affect their communities and constituents. It is easy to be a hardliner when you have no skin in the game — it is different when you can feel the repercussions of your irresponsible actions. This played out recently with Highland Park Community Schools. The Republican House Speaker told me he would not give “one red cent” to the district. Soon after I reminded him the Michigan Constitution requires all children be provided access to a public education, the funding was on its way from Lansing.
Bankruptcy proceedings would be a cleaner and more honest way to address Detroit’s issues. It would have allowed the city to take advantage of best practices in reorganizing its debt, rather than to exist under the management of a state government whose agenda is not in line with Detroit’s best interests. One of the first steps taken by a judge would be to identify outstanding debts to the city — the state would be on the hook for the $220 million in unpaid revenue sharing it owes Detroit. It would have provided greater protection for the city — under the consent agreement, the state can dictate the liquidation of assets; Chapter 9 bankruptcy filings, however, protect those assets because under the 10th Amendment, the federal courts cannot force a municipality to liquidate. This option would have given Detroit more leverage with its creditors.
Worse than signing over Detroit to Lansing, this agreement signs Detroit over to Wall Street. In fact, one of two conditions for ending the agreement relies on whether Wall Street approves a higher credit rating for the city. These are the same folks that pillaged our city by pushing subprime mortgages and ruthlessly — and in many cases illegally — foreclosing on countless families. Then, after playing fast and loose with our money for years, their institutions collapsed and they took billions of our taxpayer dollars in a bailout. The agreement does nothing to shore up the city’s financial ability to function, and does everything to shore up Wall Street with the funds it is demanding. Yet again, taxpaying citizens are forced to genuflect before the almighty cartel of big banks, too big to fail and too reckless to serve consumers in good faith.
The lack of details in this plan should have raised a red flag. Annex B lays out 21 points of the city’s Operational Reform Program, including such items as Human Services Department changes, real estate management and lighting department changes. No details are offered on what these items mean. One of the few specifics offered, appearing in Annex D, relates to the constraints on collective bargaining rights. Outsourcing is laid out crystal clear.
Annex E is a mixed bag of attractive and misguided initiatives — several of which are already underway. These include necessary items, such as creating a regional transit authority for southeastern Michigan; and ill-advised proposals, like putting Detroit’s lowest performing schools into an unfunded, unstructured, unprepared Educational Achievement Authority. Even the positive items, however, have nothing to do with this agreement — they can and should be done anyway. Also, a reference to building improvements to Shed 1 of the Eastern Market, which was dismantled years ago, illustrates the haste with which this document was prepared and the lack of diligence done in approving it. Essentially, anything important to improving conditions for the city has been left without details, while that which is a further ideological and political push to smash unions and marginalize Detroit are laid out in black and white.
Approving this consent agreement was a mistake. Our elected leaders have snatched defeat from the jaws of victory. We had the upper hand and we gave it away. Today, my heart is heavy but my resolve is strong. I remain committed to the task of combating disinvestment in our communities, expanding economic development and ensuring that our citizens are treated justly.
State Sen. Bert Johnson, D-Highland Park, represents District 2.