DETROIT — Michigan's governor signed a set of bills Friday authorizing hundreds of millions of dollars in state help for this beleaguered city.
But all the pomp and circumstance of Gov. Rick Snyder's signing at the former Globe Trading Co. building along Detroit's revitalizing riverfront could be for naught if the city's workers and retirees reject their part of what has been dubbed the "grand bargain."
"This is a story that's not over," Snyder said at a news conference celebrating bipartisan support in the state Legislature for a deal that many never imagined would come. "So while we celebrate today, let's recognize there's more work to be done."
While the signing of the legislation marks an important milestone in Detroit's recovery, Snyder also said, "This bankruptcy is a terribly difficult thing, and to be open, people are making real sacrifices." Retirees in particular are being asked for difficult-to-accept cuts to their pension and health care benefits, and "no one should ever forget that. We should always be thankful."
They'll have fewer sacrifices if they vote yes on the plan of adjustment, he said.
Snyder signed the legislation, which sends $195 million to Detroit, with strings attached. A nine-member commission will oversee the city's finances, budgets and contracts for at least 13 years and set the level of contributions made to city employees' retirement and health care plans.
"We want our right to earn our way out of review, oversight," said Detroit Mayor Mike Duggan, who took office in January.
Snyder was flanked by state legislative leaders from both political parties, Duggan, Chief Judge Gerald Rosen of U.S. District Court, state-appointed emergency manager Kevyn Orr and many more city and state leaders who spoke of gratitude for unusual bipartisanship at a critical moment for Detroit. They praised Rosen and leaders of the major philanthropic foundations who've pledged more than $450 million to help offset pension and health care cuts for Detroit's retirees.
The city filed for the largest municipal bankruptcy in history July 18, and a trial on Detroit's restructuring is set for Aug. 14 and could last five weeks. Orr has said he hopes to have Detroit out of bankruptcy by the end of this summer.
Retirees and workers have until July 11 to vote on the plan of adjustment, which calls for police and fire pensioners' cost-of-living adjustments to be reduced by about 55% with no cuts to monthly pension checks while the city's other retirees would take a 4.5% cut to monthly pension checks and have no cost-of-living adjustments.
If either the police and firefighters or general retirees vote no, the coalition of state money, $370 million pledged from charitable foundations and $100 million from the Detroit Institute of Arts to help the city's underfunded pension plans would fall apart, city officials have said. And negotiations with the city's other creditors also would be in jeopardy.
Don Taylor, president of the Retired Detroit Police and Fire Fighters Association, urged retirees to accept the deal as the best outcome they'll get.
"We are in bankruptcy," Taylor said. "Voting no is not going to prevent your benefits from being reduced. Just the opposite: It will double the cuts."
Supporters of the grand bargain wore buttons urging yes votes with a quote from Shirley Lightsey, president of the Detroit Retired City Employees Association: "You can't eat principles.Uncertainty doesn't pay the bills."
In May, Orr said early ballots showed workers and retirees supporting the plan by about 2 to 1. His spokesman, Bill Nowling, said Thursday that they cannot release detailed numbers but "are encouraged by the voting activity."
Retiree Mary Highgate, who plans to return her ballot July 1, believes Orr's plan will proceed regardless of the vote result.
"Everybody I know is voting 'no' because we don't trust them," said Highgate, 69. "I'm voting No! No! No!"
If workers and retirees vote no, Snyder said, "They're much worse off financially."
General retirees would face a 27% cut, and many of the foundations that are part of the grand bargain would be expected to withdraw their pledges.
"This is unprecedented in the history of American philanthropy that this number of major institutions would be galvanized to help solve the challenges of a once-great American city," Ford Foundation President Darren Walker said.
By comparison, foundations gave $550 million — nationally — between 2008 and 2012 to programs and causes related to America's economic crisis, said Lawrence T. McGill, vice president for research at the New York-based Foundation Center, which oversees philanthropy research.
State Senate Majority Leader Randy Richardville, a Republican from Monroe, Mich., about 40 miles southwest of Detroit, said the plight of city retirees and finding a way to reduce the cuts that they faced drove lawmakers to overcome partisan differences.
"The thing that brought Democrats and Republicans together is that there were people involved," he said, adding that public servants who spent their careers working for Detroit expecting pensions now live in all 83 Michigan counties.
"The only thing separating Detroit from the rest of Michigan is a comma," he said."As Detroit goes, so goes Michigan."
Contributing: The Associated Press