Traverse City Record-Eagle


June 15, 2014

Jack Lessenberry: Detroit's future rests on pensioners' shoulders

‘We burned our boat. We have to go over the next hill. There’s no way home other than together, forward.” — Detroit Emergency Manager Kevyn Orr.

Now comes perhaps the hardest part, as far as the future of Michigan’s largest city is concerned:


Everything comes down to this: Will Detroit city workers and retirees vote to accept pension cuts that will be difficult for some — but which are far less steep than first feared?

We won’t know until sometime after July 11, the deadline for the 32,000 ballots to be mailed in. The ballots are complex, and the votes aren’t equal; those owed larger pensions count more than others.

But here is what is clear:

If the pension fund cuts are accepted, it will be the final step in nailing down the “Grand Bargain,” under which a remarkable coalition, including the state itself, private foundations, and the Detroit Institute of Arts. have put together a pool of money designed to save the city.

Save most of the pensions, that is, and the Detroit Institute of Arts. The museum would be transferred from city ownership to a charitable trust. This would protect the museum, one of the greatest in the nation, from any future threat from city creditors.

Odds are thought to be good that U.S. Bankruptcy Judge Steven Rhodes will then approve the deal and the city’s “plan of adjustment,” meaning a final bankruptcy settlement may be near.

That will hopefully give Detroit a chance to start anew, stay solvent and work towards someday again being prosperous.

But if the pension cuts are not approved, everything — all the agreements, all the assumptions, the Grand Bargain itself — collapse.

The private foundations and the state gave their money on the conditions that the other parties would, too. A surprisingly warm and human Kevyn Orr, Detroit’s emergency manager for more than a year, spelled it out May 30, at the end of the Mackinac Conference:

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