Detroit bankruptcy eligibility doesn’t change the call for an urban agenda
By Brandon Jessup
Michigan’s urban centers and large cities across the United States now have a new precedent to follow when it comes to municipal finance and restructuring local government. U.S. Bankruptcy Judge Stephen Rhodes’ decision that the city of Detroit is eligible for Chapter 9 bankruptcy begins a process that, unlike other municipal bankruptcies, city residents will have very little interaction with.
Within Judge Rhodes’ Dec. 3 ruling, Michigan’s constitutional obligations to public pensions will not protect the estimated 20,000 Detroit households currently receiving pension benefits. Michigan Forward has not doubted the city of Detroit’s immediate need to restructure or its financial crisis.
However, the road to financial stability for Detroit and other cities cannot be balanced on the backs of pensioners and culture. Michigan’s Public Act 436 of 2013, gives the state of Michigan the ability to abuse their power over local governments. This abuse will continue throughout the bankruptcy process. Detroit’s newly elected mayor and city council isn’t engaged in developing the city of Detroit’s plan of adjustment.
We encourage Detroit’s elected leadership and civic organizations to submit alternate plans of adjustment to Judge Rhodes. Any plan of adjustment that does not include financial resources and economic support from the state, leaves Detroit’s debt at the doorstep of pensioners and the community at large.
Bankruptcy is not a victory for the city of Detroit; it’s a sour defeat for the middle class. Gov. Snyder and the Michigan legislature have no urban agenda to build Michigan municipalities only to destroy them.
On Nov. 20, DEMOS, a public policy think tank, released a report highlighting the attributes to Detroit’s political, social and financial crisis. Michigan Forward strongly believes Detroit’s short-term debt must be addressed in its plan of adjustment. This plan of adjustment will guide restructuring government and its long-term debt. Michigan Forward will continue to advocate for progressive policy that delivers recovery and reinvestment for municipalities facing financial crisis or operating in receivership. We are committed to making Detroit and Michigan’s greater metropolitan areas an example of the best of what urban America can be in the 21st century.
Beginning Dec. 8, Michigan Forward will conduct community outreach on its Michigan Recovery and Reinvestment pledge. Michigan Forward sees the five policy initiatives outlined in this pledge as foundation for a progressive agenda for immediate economic recovery to Michigan’s urban communities. A copy of the pledge and the DEMOS report on the Detroit Bankruptcy can be found at www.michiganforward.org and www.miforward.com.
Brandon Jessup is the CEO of Michigan Forward Urban Affairs Group.