LANSING, Mich. (May 18, 2022) — Sen. Sylvia Santana (D-Detroit) has introduced legislation to repeal the conditions of Detroit’s “Grand Bargain,” which used state funds to pull the city out of bankruptcy in 2014.
“At the time, Detroit’s ‘Grand Bargain’ kept the city’s lights on and kept people safe during times of tragic upheaval in one of America’s great cities — but that time is over, and the state must cede control back to local elected officials,” Sen. Santana said. “Now that the city of Detroit is solvent and thriving again, it’s time for the state to relinquish the overly burdensome restrictions from the 2014 agreement. Residents who made many financial sacrifices — especially those who forfeited retirement income — deserve to have the city back in control of the people they voted for, not officials in Lansing.”
As part of the “Grand Bargain” between the city and state, the state provided $195 million to the City of Detroit so it could ease its way out of federal bankruptcy court. In return, the state placed restrictions on the city. Under the law, the state has a nine-member commission — mostly of unelected gubernatorial appointees and chaired by the state treasurer — to provide oversight on the city’s finances for 20 years, ending in 2034.
Senate Bills 1036-1040 would end the state oversight after eight years and repeal other punitive measures put on the city under the agreement, including the:
- Repeal of the Michigan Financial Commission Review Act;
- Repeal of the Michigan Settlement Administration Authority Act;
- Repeal of the position of chief financial officer on Detroit’s financial commission;
- End of the population threshold exclusion specific to Detroit regarding opting out of employer-provided health care for public employees; and,
- Modify the restrictions placed on public pensions.
“There is still a lot of work we must do in Detroit to right the wrongs leading up to the bankruptcy in 2014, but the Motor City is back,” added Sen. Santana. “We must give control back to the community and that is precisely what my legislation intends to do.”