When Trust Turns to Rust in the Motor City

In Rick Snyder's Michigan, there's no money to make good on the pensions seniors in Detroit worked a lifetime to earn, but there's always a few hundred million available for a billionaire who wants an extravagant new sports arena.
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In Detroit, it is still about trust.

This past winter, the Detroit Free Press ran a series of blistering editorials – the first of which was titled “A Failure of Leadership” and appeared on the paper’s front page – denouncing Michigan Gov. Rick Snyder for his about-face on so-called “right-to-work” laws.

These laws weaken the ability of workers to bargain collectively, by driving a wedge between those who join a union and pay dues, and those who benefit from a union’s contract but choose not to pay their fair share for that representation.

Snyder, who campaigned for election assuring voters that “right-to-work” was too divisive for Michigan, reneged on his oft-repeated promise to keep it off his legislative agenda. During a lame-duck legislative session, Snyder rammed “right-to-work” into law.

Calling Snyder’s move “an offensive bait-and-switch,” the Free Press, one of the largest daily newspapers in the country, condemned the anti-union law as “one of the most cowardly examples of legislation that completely trashes the democratic process.”

“We trusted Snyder's judgment,” the paper wrote of the support it had shown him in the past. “That trust has now been betrayed – for us, and for the hundreds of thousands of independents who voted for Snyder with the conviction that they were electing someone more independent, and more visionary, than partisan apparatchiks like Wisconsin's Scott Walker.”

That betrayal of trust helps explain why it is so difficult for Detroit’s working women and men to talk about the bankruptcy without rancor, or to respect calls for shared sacrifice from the governor and his politically appointed emergency financial manager.

The collapse of Detroit industry during the past 40 years is not the fault of modestly paid public-service workers. When Wall Street bankers and corporations helped saddle Detroit with crippling debt, public workers stayed and kept the city running.

Detroit’s public service workers and retirees already made huge sacrifices, including $160 million in annual savings from a 10-percent pay cut, health benefit reductions and a 40-percent cut in future pension benefits.

Detroit’s workers and retirees negotiated in good faith to reach an equitable solution and avoid bankruptcy, but the sacrifices were all one-sided.

Their pensions, which Snyder is targeting with the bankruptcy filing, average $19,000 per year. For the record, these pensions account for only 4 percent of Detroit’s budget expenditures. And just as important, public service employees worked their entire lives and made sacrifices. In exchange, they were promised a pension that would allow them to retire with dignity.

That promise wasn’t just a gentleman’s agreement, sealed with a handshake at City Hall. It’s codified in the state constitution.

As Michigan’s Republican attorney general declared, the state constitution is “crystal clear in stating that pension obligations may not be diminished or impaired.” Suspension or reduction of pension payments as a result of bankruptcy would violate the constitution and result in severe hardship for workers, retirees and their families.

Snyder, meanwhile, doled out more than a billion dollars in tax cuts to multinational corporations, many of which shipped American jobs overseas. Snyder found the money for these sweetheart deals by reducing aid to school districts, towns and cities across the state. He is not just attacking Detroit; he is willing to take money from working-class families across the state to pad his big business friends’ bank accounts.

To be clear: Rick Snyder is giving Michigan taxpayers’ money to the very entities that helped collapse their state’s economy.

As if to add insult to injury, Snyder announced just days after authorizing Detroit’s bankruptcy that some $250 million in taxpayer money would be spent to build a new hockey arena in the city. The recipient of this generous corporate welfare? Little Caesars Pizza founder and owner Mike Ilitch, whose personal worth is $2.7 billion.

In Rick Snyder’s Michigan, there’s no money to make good on the pensions seniors in Detroit worked a lifetime to earn, but there’s always a few hundred million available for a billionaire who wants an extravagant new sports arena.

In the most recent breach of public trust, Snyder made a failed attempt to get the bankruptcy judge to shield him, his lawyers, and other potential government witnesses from questioning by AFSCME Council 25 and the United Auto Workers. It would have denied Michigan citizens the transparency they deserve from Snyder.

A move like this, at a time when most folks wouldn’t pay attention (it was right before the Labor Day weekend) is pure Snyder. We saw it with his hasty, lame-duck passage of so-called “right-to-work.” We see it now, with his hasty attempts to deprive workers and retirees of their hard-earned, constitutionally protected pensions.udge to shield him, his emergency manager and other government witnesses from deposition and make any real discovery impossible in the upcoming bankruptcy case.

In December 2012, the Detroit Free Press asked its readers: “What reasonable person now believes that Snyder has the will or the wherewithal to deliver Michigan, or even his own party, from the failed politics of division?”

Nine months later, the question is more pertinent than ever.

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