One Year Ago. It’s A Memory We’re Not Fond Of.

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It’s not a memory I’m fond of.

But one year ago, I remember watching news reports as the governor of my home state, Rick Snyder, emerged from police barricades after signing the so-called “right to work” bill into law in Michigan.

The whole thing was like a bad dream. Gov. Snyder had said for years that so-called “right to work” — restrictions on union dues aimed at weakening workers’ voices at the workplace — was not on his agenda. Then on December 6, 2012, he changed course, and called on the legislature to pass “right to work.”

With lightning speed, the Republican-controlled legislature went to work. There were no committee hearings, highly unusual for a major bill like this. The bill text was almost identical to an ALEC model bill, but that didn’t seem to faze the legislators.

On December 11, as more than 12,000 Michigan workers raged outside the state house, the bills for both public and private sector workers are passed despite bipartisan opposition, and Gov. Snyder had signed them into law by evening.

That was not a fun day.

After that fight, Working America pledged to continue the fight in Michigan and we have.

Will you stand with us to continue fighting into 2014?

December 11, 2012 was a rough day. But we know what it takes to win in Michigan: hold leaders accountable for their votes, mobilize a team of activists in communities across the state and support candidates that stand with working families.

The assault on my home state hasn’t stopped there. Gov. Snyder, the Republican-controlled legislature, and emergency managers like Detroit’s Kevyn Orr continue to impose a narrow, corporate-friendly agenda on Michigan without regard to the lives and livelihoods of Michigan’s working families.

With your help, we can fight back against the extreme agenda that Gov. Snyder has pushed through and make Michigan the state we all know and love again.

We’ve seen a lot of things we value come under attack in Michigan lately, but we don’t have to stand for it. With your help, Working America can make a difference in Michigan. Help us fight back now.

We really can’t do this without you.

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The Real Reason Detroit Went Bankrupt

As the story goes, the city of Detroit went bankrupt because of $18 billion in long-term debt, in large part caused by pension and health care benefitsA new report, written by Wallace Turbeville and released today from Demos, says that narrative is inflated, inaccurate and irrelevant to explaining the city’s bankruptcy.

Despite what the city’s emergency manager Kevyn Orr, who was hired by Gov. Rick Snyder (R), says, the $18 billion figure is not relevant to the city’s bankruptcy. To emerge from the bankruptcy, according to chapter 9 of U.S. bankruptcy code, Detroit only needs to address its cash flow shortage, a number that even Orr sets at only $198 million. But that number, much like the $18 billion number, is inflated because it goes with extremely aggressive assumptions for economic trends that are very unlikely to represent what really happens.

When projecting costs, governments often create several projections, often reflecting best-case scenarios, worst-case scenarios and some moderate position in between those two. Governments usually choose the moderate option in order to determine their budget projections. But Orr, Turbeville says, has chosen the worst-case scenario and isn’t at all based on a certain liability that the city will face. Furthermore, Orr includes in that total nearly $6 billion of debt from the Water and Sewage Department debt as city liability, despite the fact that this liability is based on an area much broader than the city. The department covers 3 million people in southeastern Michigan, not just the slightly more than 700,000 people who actually live in Detroit.

Turbeville notes that the city’s operating expenses have declined by 38% since the beginning of the Great Recession. During that same time, the city’s pension obligations only rose by $2 million. Health care expenses increased by 3.25%, less than the national average of 4%. The biggest proportion of increased costs for the city actually comes from debt service and financial expenses related to complex Wall Street investments that amounts to more than pension and health care increases combined. Other key components of the city’s deficit are:

  • A significant decline in revenue based, in large part, on the city’s declining population, which contributed to declines in tax revenue and property values.
  • A decline of $67 million in state revenue sharing with the city.
  • As much as $20 million annually in corporate subsidies that have provided questionable benefits to Detroit.

The report concludes:

Detroit’s bankruptcy is, at its core, a cash flow problem caused by its inability to bring in enough revenue to pay its bills. While emergency manager Kevyn Orr has focused on cutting retiree benefits and reducing the city’s long-term liabilities to address the crisis, an analysis of the city’s finances reveals that his efforts are inappropriate and, in important ways, not rooted in fact. Detroit’s bankruptcy was primarily caused by a severe decline in revenue and exacerbated by complicated Wall Street deals that put its ability to pay its expenses at greater risk. To address the city’s cash flow shortfall and get it out of bankruptcy, the emergency manager should focus on increasing revenue and extricating the city from these toxic financial deals.

Read the full report.

Reposted from AFL-CIO NOW

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Detroit Retiree Invites Governor Snyder Over for Dinner

Donald Smith is one of the 21,000 retired public workers in Detroit facing pension and health care cuts in the wake of Michigan Governor Rick Snyder and Detroit Emergency Financial Manager Kevyn Orr’s management of the city bankruptcy.

Detroit public workers have already made sacrifices to keep the city afloat, including a $160 million in annual savings from a 10 percent pay cut, health benefit reductions, and a 40 percent cut in future pension benefits, Orr is making public worker pension cuts a key part of Detroit’s restructuring.

Remember, Orr was appointed by Gov. Snyder to be “emergency financial manager,” a position that does not answer to voters yet can overrule any local elected official. Michigan repealed the governor’s ability to appoint such managers in 2012, but Snyder and the legislature simply passed the law again.

Donald Smith decided Snyder needed to see a human face on Orr’s proposed cuts. He wrote to the governor:

Dear Governor Snyder,

My name is Donald Smith and I worked for the city of Detroit for more than 29 years.

Over close to 3 decades of service to the city earned me a pension of about $800 a month.  After taxes and health care expenses are taken out, I am left with very little money each month to pay my rent, buy groceries and to cover my medical prescriptions.

Because of your decision to force Detroit into bankruptcy, I am starting to wonder which of my basic I needs can live without.  I did not bankrupt Detroit – in fact, I went to work every day to make it a better place to live. So I can’t understand why you would ask retirees like me to give up the pension benefits we earned.

If you believe that we can afford to make do with less, then you must not know us. That’s why I want to invite you to my home so you can get to know me and see what life is like for retired city employees.  I hope you’ll join my family for dinner and hear what really matters to us in Detroit.

We are willing to work around your busy schedule.  We look forward to sharing a meal and our perspective with you.

Smith gets $800 a month from his public pension and $1,000 a month in Social Security. “Sometimes I have to make up my mind between getting my medicine and food,” he told WXYZ.

Gov. Snyder refused the invitation when asked.

Take Action: Tell Gov. Snyder to protect Detroit public employee pensions.

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My Grandfather Spent 20 Years Working In A Detroit Factory

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My grandfather spent 20 years of his life working in a Detroit factory.

He worked hard for what he earned. He trusted that sacrificing some of his pay to invest it in a pension would pay off after years of hard work. So that’s what he did. He retired, and his pension allowed him to provide for himself and my grandmother.

He and his coworkers knew that the pensions that they invested in were a valuable part of their income, not just a handout from their employer.

Right now, in Detroit, Emergency Financial Manager Kevyn Orr doesn’t see pensions the same way.

A quick review: In 2011, Gov. Rick Snyder and his allies in the Republican-controlled legislature passed a bill allowing entire cities to be taken over by “emergency financial managers.” These EFMs, appointed by the governor, were allowed to completely overrule decisions made by local elected leaders.

In the 2012 election, Michigan voters decisively overrode the EFM law. Gov. Snyder and the legislature responded simply by passing another one.

In March, Snyder chose lawyer Kevyn Orr to single handedly manage the city of Detroit. From the beginning, it didn’t seem that Orr had his priorities in order. He said the city had been “dumb, lazy, happy, and rich,” while unapologetically living large in a penthouse, ordering room service, and employing an assistant at $225,000 a year.

In September, Orr proposed a sweeping wage freeze and essentially privatizing public employee pensions. Orr’s spokesperson suggested that city workers do not contribute at all to their pensions.

What Orr isn’t saying is what these workers sacrificed to protect their pensions. They accepted pay cuts, health insurance cuts and cuts to future pension benefits just to guarantee that the pensions they had worked a lifetime for would be there for them when they retired.

This is unacceptable, and we need to do better.

We can’t allow the wealthy elite like Snyder and Orr to take away hard-earned income from working families. Workers like my grandfather worked, saved, and sacrificed for years to make sure their pension would be there. It’s not a piggy bank for Orr and his rich friends to play with.

We need to send Snyder a message now and demand that he respects Detroit city workers.

Together, we can hold leaders like Gov. Snyder accountable and stand up for all working people in Michigan.

Send a message now.

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