Insanity: Doing the same thing over and over again and expecting different results. — Albert Einstein
The great physicist’s wisdom may help Michiganders put the right perspective on the need to resolve Detroit’s bankruptcy. Being frank, what’s been done in Detroit in the past has not worked. Repeating it would be lunacy. Yet leaving Detroit to flounder without state involvement is not a solution.
Gov. Rick Snyder and many of the others involved aren’t interested in doing the same thing over and over again. There won’t be a bailout for Detroit, a gift of money that lets the city go its merry way.
Instead, Snyder’s proposal would provide a modest amount - $350 million paid over 20 years - to support a plan that makes significant changes in the way things have been done in Detroit.
n Snyder’s proposal calls for professional management of the city’s pension funds, which would put a stop to the practice of leaving local pension boards unsupervised in making decisions that, over time, have produced an estimated $3.5 billion deficit in the pension funds (a figure disputed by some). Snyder wants an independent entity to oversee and provide professional expertise to the city’s general pension system.
n Pensions won’t be untouched, although the final impact will be reached in mediation. As Snyder said in announcing his plan: “It will not make retirees whole, but it would significantly reduce the burdens that they would otherwise face.”
n The Detroit Institute of Arts would be required to establish a new governance structure that separates it from the city. This would protect the art collection from being sold to satisfy creditors. But it also means changes in how the DIA views its role, from a regional asset to one with a statewide audience.
n Creditors need to understand that like everyone else, they won’t get exactly everything they want (case in point, the DIA’s art won’t provide an easy bandage for their wound).