LANSING, Mich. (AP MODIFIED) - Michigan Gov. Rick Snyder is backing a plan to commit $350 million in state funds to shore up Detroit's pension funds and prevent city-owned art from being sold during they city's bankruptcy.
The Republican joined legislative leaders on Wednesday in announcing a plan that would provide as much as $350 million over 20 years.
The money would match the roughly $330 million that charitable foundations have pledged so far to help the debt-ridden city. Detroit's debt is estimated at $18 billion or more, including $3.5 billion in underfunded pension obligations.
Snyder says the money wouldn't be a bailout. He says it would simply help Detroit quickly settle its bankruptcy.
"We are working on a fiscally sound mediation solution with clear conditions. We will not participate in a bailout, nor allow these funds to go anywhere other than directly to retiree pensions," said Snyder. "This is an opportunity to work together to find solutions that will allow Detroit to get on a firm foundation faster, help pensioners, and ultimately save the Michigan taxpayers millions in the long run. I want to applaud the foundations for taking this unprecedented and generous step and the mediators for facilitating these discussions."
Republican legislative leaders say the plan will be a tough sell in the Legislature, but that it's better than a protracted legal fight.
The DIA released the following statement after the announcement:
Governor Snyder's announcement is continued good news for the City of Detroit, its pensioners and the DIA. Support from the Governor and legislative leadership, the foundation community and our supporters underscores the importance of the DIA in building a strong, healthy city and state. We are working hard to play an active and thoughtful role in this ongoing process that will allow for a significant contribution to this effort and ensure long-term support for the City's pension funds and sustainability for the DIA. While there has been a great deal of speculation as to the DIA's participation in this effort, the DIA remains focused on continuing conversations with the mediation team, state, county and city officials, our board members, staff and supporters to determine how we can be as productive and supportive as possible in this process, with the ultimate goal of a balanced, achievable solution that provides for strong DIA involvement in this emerging plan and ensures the museum's ability to meet its immediate budget commitments and long-term endowment needs.