On Jan. 22, Republican Gov. Rick Snyder proposed redirecting $350 million over 20 years from Michigan’s tobacco settlement revenue to the city of Detroit. The reallocation of funds was pledged in order to help bolster city pensions, estimated to be underfunded by $3.5 billion. Snyder stressed that his proposal is not a bailout, but rather a settlement focused on mitigating the impact on retirees. By allotting this money to the city, Snyder is crossing party lines and showing the rest of the state that Detroit is worth the investment. The proposed plan will undoubtedly aid pensioners; however, future funding from the state should be allocated by the city itself.
With the announcement of his proposal last week, Snyder demonstrated his commitment to Detroit. Designating much-needed funds to city pensions will potentially benefit the entire state by speeding up the bankruptcy process and reducing legal expenses. However, the proposed plan must first be approved by the legislature before reaching the bankruptcy mediation table. Both Democratic and Republican leaders are on board with the solution, voicing their support for Snyder’s proposal. Though, some Republicans are wary of the plan, calling for some type of professional oversight of the pension funds.
The key component of this plan is guaranteeing the money will actually fund city pensions. Many city employees worked their entire adult lives paying into their pensions. These pensioners deserve to live out their retirement in financial security and dignity. Even with the state’s proposed financial assistance plan and privately pledged donations reaching $330 million from nine local and national foundations, pensioners could see a sharp reduction in their monthly benefits. It’s imperative that Snyder’s proposed money go to Detroit’s retirees.
Snyder and the state government need to continue supporting Detroit — financially and beyond. The city is not only a vital part of Michigan’s history but also its future. Detroit offers many incredible attractions — the Detroit Institute of Arts, Belle Isle Park, Detroit Eastern Market, Greektown and the Motown Historical Museum, to name a few. However, Detroit’s charisma lies not in its physical structures but in the unique cultures and spirit created within the city. Every day, people are moving to Detroit, working hard alongside current residents to rebuild an iconic American city.
Gov. Snyder has taken steps in the right direction with his plan to help city pensioners. Detroit has a long way to go before it can become what it once was again. In order to get back to its full potential, the city needs continued support from the state and businesses alike. General Motors, the industrial behemoth of the Motor City, pledged to upgrade their Detroit plant helping to create and retain jobs in the city. With increasing innovation, investment and job creation, Detroit has the ability to revitalize its economy and propel Michigan into the future.