Traverse City Record-Eagle


February 9, 2014

Jack Lessenberry: Implications beyond Detroit

For thousands who spent their lives working for the city of Detroit, the main issue is their pensions.

Will they be cut? And if so, by how much?

Whatever happens eventually may have implications that stretch far beyond the Motor City. Though clearly in terrible shape, Detroit is far from the only city with severe financial problems.

U.S. Bankruptcy Judge Steven Rhodes sent shock waves statewide last Dec. 3, when he ruled pensions could in fact be cut.

Before that, many believed the Michigan Constitution made it impossible to eliminate benefits retired workers had earned. However, the judge thought otherwise.

“Pension benefits are a contractual obligation of a municipality and not entitled to any heightened protection in bankruptcy,” he said.

What the Michigan Constitution says on the subject is this: “The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired.”

That seems straightforward - but did the authors of the constitution, which was narrowly adopted by the voters in 1963, really mean that pensions could never be reduced in a crisis?

Well, guess what. The man responsible for that clause is alive, well and insistent that he and his fellow framers of the Michigan Constitution never thought that it would ever be legitimate to short anyone on their pension.

“Absolutely not!” said 77-year-old Jack Faxon, these days the headmaster of the International School in Farmington Hills, a multilingual academy that he founded in 1968.

“We argued over a lot of issues, but that wasn’t controversial at all,” said Faxon, who was the youngest elected delegate to the 1961 Constitutional Convention, or Con-Con.

“Getting people to agree that pensions should be protected was like getting them to agree that Sunday is Sunday.”

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