Detroit Said to Get $350 Million Pension-Aid Deal From State
By Chris Christoff - Jan 22, 2014
Michigan would pay $350 million over 20 years to reduce Detroit’s pension liabilities under a deal struck by Governor Rick Snyder and legislative leaders, according to a person familiar with the discussions who requested anonymity because they hadn’t been made public.
The money would be in addition to $330 million that nine foundations pledged through bankruptcy court mediation to reduce cuts in city pensions, and to protect Detroit’s art collection from a forced sale to pay $11.5 billion in unsecured debt. The money would be linked to a broader settlement that would protect the collection, the person said. The deal is to be announced today.
The state money would need approval from the Republican-controlled legislature. The $350 million would come from about $250 million Michigan receives annually under a 1998 court settlement to compensate states for the cost of illnesses caused by smoking, the person said.
The fund, which also is used for other programs, has $76.6 million available this fiscal year and a projected $53.2 million next year, according to the Michigan House Fiscal Agency.
Mediators led by U.S. District Chief Judge Gerald Rosen in a statement today expressed a hope that “the governor’s announcement will further assist the parties in reaching as many agreements as possible which can be included in an agreed-upon plan of adjustment.”
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