Detroit unions and a Michigan state judge are fighting back against Detroit 'emergency manager' Kevyn Orr's filings Thursday to force the city into bankruptcy proceedings, a move that is likely to decimate pensions and benefits that city workers and retirees have already earned.
The bankruptcy—driven forward by Orr and backed by Republican Governor Snyder—is now under debate in court hearings that kicked off Monday morning, after a Michigan state judge ruled Friday that the bankruptcy proceedings are unconstitutional, because they steamroll Michigan state laws that guarantee pensions.
The Michigan attorney general was quick to hit back, insisting that chapter 9 bankruptcy proceedings trump state law.
"These retirees worked hard and played by the rules. The average general city employee pension is less than $18,000 per year, attacking these pensions is not only unfair, it is illegal."
As legal battles play out in the courts, union members are taking their outrage to the streets, calling for a July 25 rally to defend benefits and pensions for the city's 21,000 retirees and 9,000 public workers.
The bankruptcy proceedings allow city officials to eradicate union contracts and chop benefits and pensions to workers and retirees, to close what is estimated to be a $3.5 billion shortfall in the pension budget. While officials are required to 'renegotiate' their debts to their lenders, union members say there have been no negotiations of any kind.
Orr has publicly signaled that pensioners will be the first on the chopping block, declaring, "Make no mistake about it, there have to be concessions."
"There is too much at stake to play political games with the hard earned retirement security of Detroit’s public workers," declared Detroit AFSCME Local 207 President Lee Saunders in a statement Friday. "These retirees worked hard and played by the rules. The average general city employee pension is less than $18,000 per year, attacking these pensions is not only unfair, it is illegal."
Despite a Michigan-wide referendum last November aimed at preventing 'emergency managers' from being granted dictatorial powers, state legislatures pushed through a "right to work" law in December and allowed Snyder to appoint Orr to financially 'restructure' the city.
Since his appointment in March, Orr has enthusiastically pushed forward privatization measures and gutted the city's meager public goods, including mass transportation, schools, and garbage collection.
Critics charge that the near 'absolute' powers granted to Kevyn Orr constitute a Republican state takeover of Detroit, in a move that disenfranchises voters in a city where 80% of residents are black.
Labor Notes reports that workers are looking nervously to a Rhode Island law that, when municipalities declare bankruptcy, big bank lenders must be paid back before pensioners.
As John Nichols points out in The Nation, if Detroit were a bank instead of a city of 700,000 people, it would have probably been bailed out by now.