In this week’s debate between Michigan Gov. Rick Snyder (R) and Democratic challenger Mark Schauer, Snyder ignored the advice Sgt. Joe Friday in “Dragnet” always proffered to witnesses and suspects, “Just the facts” when it came to his record on education, jobs and the economy. That’s alright. The good folks at You Got Schooled 2014 have the facts that Snyder ignored.
Here’s a sample. Click here for the full story.
On charter schools:
Rick Snyder: “They are giving parents choice because we have had a lot of failing schools, and the point was to give parents the opportunity to give their kids an education, create competition.”
Mark Schauer: “The first thing I will do is put the money back [Snyder] took from public schools. It is irrefutable.…Charter schools were allowed to expand with no oversight. That was a big mistake by this governor.”
- Traditional public schools perform better than charter schools, even when poverty is taken into account.
“According to the Free Press’ review, 38% of charter schools that received state academic rankings during the 2012–2013 school year fell below the 25th percentile, meaning at least 75% of all schools in the state performed better. Only 23% of traditional public schools fell below the 25th percentile.“Advocates argue that charter schools have a much higher percentage of children in poverty compared with traditional schools. But traditional schools, on average, perform slightly better on standardized tests even when poverty levels are taken into account.” —“Michigan Spends $1B on Charter Schools but Fails to Hold Them Accountable,” Detroit Free Press
- More than 80% of Michigan charter schools are run by for-profit companies.
“Michigan has more for-profit charter schools than any other state in the country. ‘We’re an anomaly in the nation,’ says Western Michigan University professor Gary Miron. He says over 80% of the charter schools in Michigan today are operated by for-profit companies, while the national rate is 35%.” —“Three Little-Known Facts About Charter Schools in Michigan,” Michigan Radio
On $1.7 billion business tax cut:
Snyder: He thinks business owners shouldn’t be taxed on income beyond what regular folks pay. He said, “We made a fair system to encourage job creation.”
Schauer: “Yes, I will repeal the job-killing pension tax. It is wrong, it is bad tax policy and it is breaking a promise.…Our ‘accountant governor’ is missing some columns on his spreadsheet and it is called people.”
- Snyder shifted the tax burden from businesses to individuals, so low-income individuals and seniors saw their taxes increase the most.
“A major tax shift approved by the Michigan Legislature in 2011 made the state’s tax system significantly more regressive by cutting business taxes by 83% while increasing taxes for individual taxpayers by 23%, with a net loss of state revenue. Low- and moderate-income families were hardest hit, as many of the credits and deductions intended to reduce their income tax burden were reduced or eliminated, most notably a 70% cut in the state Earned Income Tax Credit—a refundable tax credit that has been shown to lift children and families out of poverty, increase employment and reduce the need for public assistance.” —“Losing Ground: A Call for Meaningful Tax Reform,” Michigan League for Public Policy
- Snyder’s tax increases included a new tax on pensions.
“A big and controversial part of that income tax increase was the taxing of public and private pension income. That change alone was expected to raise for the state, and cost pension-receiving taxpayers, about $343 million in fiscal year 2012–2013.
“The changes are phased in, with those reaching the age of 67 in 2020 or after facing more taxes.
“According to a House Fiscal Agency analysis, a retired couple born after 1952 with $48,000 in pension income would pay $3,130 more in taxes.” —“Foul on Snyder for Playing Word Games with Pension Tax,” Bridge magazine
For even more on Snyder, check out 5 Reasons Why Rick Snyder Is One of the Worst Candidates for Working Families in the 2014 Elections.
Reposted from AFL-CIO NOW
Tags: aflcio, Education, Jobs, labor, Mark Schauer, Michigan, Retirement, Rick Snyder, taxes, union
It’s an election year, and we are quickly approaching the time when working families will have the opportunity to go to the polls and vote for candidates who support policies that protect or expand our rights, raise wages and work for an economy that benefits everyone, not just the wealthy few. We’re going to focus our spotlight on some of the key candidates who care about working families, and one of those candidates is Mark Schauer, who is running for governor in Michigan.
Mark Schauer, a member of Laborers (LIUNA) Local 3555, has never forgotten his working-class roots. The son of a teacher and a nurse, Schauer paid for his college education with a paper route, by flipping burgers and pumping gas. When Schauer was in Congress, he was fierce champion for working people. He stood by workers by:
- Saving auto jobs: Protecting Michigan’s heritage and jobs by fighting for the auto industry rescue.
- Supporting the Make It in America law: Creating tough, new Buy American laws to invest in Michigan workers. [H.R. 4213, Vote 424, 5/28/10]
- Demanding tax breaks for working families: Cutting taxes for middle- and lower-income families, expanding child care, college and home buying tax credits. [H.R. 1, Vote 70, 2/13/09]
That’s just some of what Schauer did for working families in Congress. Here are his priorities as governor for every family in Michigan, not just a handful at the top.
Reposted from AFL-CIO NOW
Tags: aflcio, auto workers, Bring Jobs Home, Jobs, labor, liuna, Mark Schauer, Michigan, outsourcing, Rick Snyder, union
With Mad Men wrapping up this season, we will no longer be getting a weekly dose of what the workplace was like during the 1960′s.
Well, in a way, we will.
Mad Men actress Christina Hendricks appeared in a video on the site Funny Or Die this week in which she points out that when it comes to wages for women and the gender pay gap, we’re very much stuck in the 1960′s.
Hendricks appears as her Mad Men character Joan Holloway, recently hired at a modern office. She is hopelessly out of place: she can’t use the modern phones, mixes a martini instead of using the water cooler, and even tries to erase text on her computer with the back of a pencil.
When questioned about her odd behavior, she brings up a few key statistics: women make 23 percent less than their male counterparts, nearly 70 percent of minimum wage workers are women, and only 15 percent of Fortune 500 CEOs are female.
“So I figure if we’re going to run our businesses like it’s the 1960′s,” she says, “I’m going to act like it.”
“Or I could’ve had a stroke…I smoke a lot.”
Here’s what Hendricks doesn’t mention: that lawmakers across the country are working to to make these grim statistics a thing of the past, and that there are forces fighting equally as hard to keep the status quo.
A bill sponsored by Sen. Barbara Mikulski (D-MD) would have made it harder for companies to pay women less than men and easier for women to take legal action against employers who deliberately pay them less. On April 9, 43 Republican Senators and 1 Independent joined to filibuster the bill, requiring a 60 vote threshold and denying us a public debate.
As for low wages, Rep. George Miller (D-CA) and Sen. Tom Harkin (D-IA) introduced a bill to raise the minimum wage to $10.10, but it never reached an up-or-down vote. On April 30, 41 Republicans lead by Minority Leader Mitch McConnell filibustered the bill. All this while at least 69 percent of Americans support raising the wage.
(More on the ridiculousness of these filibuster votes and how the media reports them.)
Luckily, there’s been action in the states. In June, Massachusetts became the tenth state this year to raise the minimum wage, a list that includes Republican-dominated Michigan. And Gov. Maggie Hassan (D-NH) signed into law a statewide version of Sen Mikulski’s pay gap bill in the Granite State.
Like its viral video hit “Minimum Wage Mary Poppins” last month, Funny Or Die is writing the book on how to use parody videos to shed light on economic issues. But often, when you include the part of the story about the individuals and forces working hard to keep things the way they are–or make them worse–everyone stops laughing.
Tags: Barbara Mikulski, equal pay, Maggie Hassan, Massachusetts, Michigan, minimum wage, Mitch McConnell, New Hampshire, pay gap, Rights At Work, Tom Harkin, women
On Wednesday, Michigan Gov. Rick Snyder (R) signed into law a bill that would repeal the current minimum wage law, raise the state minimum wage to $9.25 by 2018, and index the wage to inflation thereafter.
The bill was nearly identical to one proposed by Gov. Snyder’s probable Democratic opponent, former-Rep. Mark Schauer. Last year, Snyder’s office responded to Schauer’s proposal by saying that raising the minimum wage wasn’t “a burning issue,” and that it could have “unintended consequences.” Other previous statements also indicated Gov. Snyder opposed efforts to raise the wage.
So what happened?
The people of Michigan happened. Specifically, citizen-lead effort by Raise Michigan to put a minimum wage increase to $10.10 by 2017–and making that the tipped minimum as well–on the November ballot.
In Michigan, if a law that is the target of a ballot initiative is repealed, the initiative effort is canceled or at the very least thrown into legal doubt. Republicans in the Michigan legislature introduced a weaker minimum wage bill aimed at doing just that.
Faced with bad options, Senate Democratic Leader Gretchen Whitmer and several of her colleagues opted to work with Republicans to strengthen the bill:
As disappointing as it was to see this legislation introduced, when it became clear that Republicans were intent on passing it and take that choice away from voters, I decided to roll up my sleeves, take a seat at the table and work to make significant changes to the bill to infuse it with some of the real demands of our workers.
The result was what happened today: a minimum wage increase passed with bipartisan majorities in both Houses was signed into law by a governor who previously opposed it.
Raise Michigan, for their part, will continue their effort to get the higher increase on the November ballot. They are still submitting nearly 300,000 petition signatures to the Secretary of State.
In the meantime, even if the petition drive is truly scuttled, Michigan minimum workers will still see a raise of $0.90 an hour in September.
Photo by Raise Michigan on Facebook
Tags: Gretchen Whitmer, Mark Schauer, Michigan, minimum wage, Rick Snyder
A class-action lawsuit has been filed against McDonald’s and the company’s franchisees in three states, alleging various forms of wage theft at restaurants in California, Michigan and New York, Salon’s Josh Eidelson reports. Among the accusations are stores not paying properly for overtime hours, workers being required to clean uniforms off the clock and employees being required to show up for work, but not allowed to clock in when business is slow.
Eidelson argues that one of the key aspects of the lawsuit is that it will shine a light on how heavy a role the corporation plays in the running of franchise restaurants it doesn’t own:
The most significant threat posed by the potential class actions—one apparent arm in a campaign of media, consumer, political, economic and workplace pressure on fast food giants—may be its potential to draw scrutiny and force disclosures about the relationship between the giant McDonald’s corporation, which netted over $5 billion in profit last year, and its smaller individual franchisees, which are the legal employers of most McDonald’s workers.
Reposted from AFL-CIO NOW
Tags: aflcio, California, fast food, mcdonalds, Michigan, New York, wage theft
If the United States acted forcefully to end currency manipulation by China and other nations—and there is legislation to provide the government the tools to do so—it could create as many as 5.8 million jobs (40% in manufacturing) and reduce the nation’s trade deficit by as much as 72.5%, according to a new report from the Economic Policy Institute (EPI).
Currency manipulation is the largest single cause of the U.S. trade deficit, and the Chinese government is the world’s biggest currency manipulator. It deliberately keeps the value of its currency artificially low and that artificially raises the price of U.S. exports to China and suppresses the price of Chinese imports into the United States. This artificial price advantage is one of many pull factors that encourages U.S. businesses to shut down operations here and manufacture in China instead. Says AFL-CIO President Richard Trumka:
U.S. workers can compete with anyone in the world, but they cannot compete successfully on a lopsided playing field. [Currency manipulation] is a major contributing factor in our lopsided trade relationship with China. Meanwhile, U.S. manufacturing companies and workers bear the brunt of these unfair policies.
The EPI report finds that:
- Eliminating currency manipulation would reduce the U.S. trade deficit by $200 billion in three years under a “low-impact” scenario and $500 billion under a “high-impact scenario.” This would increase annual U.S. GDP by between $288 billion and $720 billion (between 2.0% and 4.9%).
- The reduction of U.S. trade deficits and expansion of U.S. GDP would create 2.3 million to 5.8 million jobs, reducing the U.S. jobs deficit by between 28.8% and 72.5%.
- About 40% of the jobs gained would be in manufacturing, which would gain between 891,500 and 2,337,300 jobs. Agriculture also would gain 246,800 to 486,100 jobs, heavily affecting some rural areas.
Read the full EPI report here.
Bipartisan legislation in Congress (H.R. 1267 and S. 1114) would crack down on currency exchange rate manipulation and hold countries that manipulate their currencies accountable. Trumka says:
We call on Congress to fight on the side of American workers and domestic manufacturers and farmers to put an end to currency manipulation now.
While China is the largest currency manipulator, other nations do so, too. Japan, which is one the 12 TPP nations, (China is not involved) has been accused of weakening the value of the yen to benefit its auto industry.
Currently Japan exports some 130 cars to the United States for every car that U.S. automakers export to Japan. One of the major reason for that imbalance is currency manipulation says the UAW.
As a consequence of Japanese government currency intervention, in a market such as the United States, Japanese imports have seen several thousand dollars in effective subsidies while, at the same time, exports from the United States to Japan have seen several thousand dollars in added costs….The impact of these policies undermines American auto exports and American jobs and the investment they support.
Yesterday, Sens. Sherrod Brown (D-Ohio) and Sandy Levin (D-Mich.), both sponsors of S. 1114, said that without currency manipulation rules as part of the Trans-Pacific Partnership (TPP) trade and investment agreement and other pending trade agreements, Congress is unlikely to approve the trade bills. Says Brown:
The trade agenda is not moving until currency is part of it.
The Obama administration’s is pushing to have the TPP agreement considered under Fast Track rules in Congress.
Under the Fast Track process, Congress can only vote yes or no on the full agreement. It cannot amend or improve the bill.
Sign the petition to Congress to stop bad Fast Track trade deals over the next four years, including the TPP.
Also, if you haven’t signed a letter for a better TPP, do it here.
Reposted from AFL-CIO NOW
Tags: china, Jobs, Michigan, Ohio, Sandy Levin, Sherrod Brown, tpp, trade, uaw
A year ago, in one of the most shocking reversals in the state’s history, Michigan Gov. Rick Snyder signed a “right to work” bill into law behind closed doors as more than 12,000 protesters raged outside.
Right wing groups crowed, saying union restrictions in the home of the auto industry meant the labor movement was on its last legs. They talked about which states would go next.
And then, nothing.
Well, not nothing. But what anti-worker pundits said would be a domino effect was more like a cricket effect. In 2013, no state passed a “right to work” law.
Incorrectly-named “right to work” laws put restrictions on contracts union workers can make with employers. They ban fair share clauses which require that workers pay dues to have the protection of the union. Unions are left in the position of providing services without being able to fund those services, and they starve.
“Right to work” laws have nothing to do with freedom. They are simply a tactic to defund unions and weaken the ability of workers to advocate for themselves. And it shows: states with “right to work” laws have lower wages, higher poverty rates, and more workplace injuries and fatalities than free bargaining states.
In 2013, workers didn’t stand for it.
In Missouri, where Republicans controlled supermajorities in both the state House and Senate, some legislators pursued a “paycheck deception” bill, which restricts unions’ ability to make political contributions. Missouri House Speaker Tim Jones (R-Eureka) called it a step toward a “right to work law.” Based heavily on an ALEC model bill, paycheck deception moved swiftly through Republican-lead committees.
But workers, union and non-union (including hundreds of Working America members), made their voices heard. Emails, letters, and phone calls flooded legislative offices in Jefferson City. The bill passed the Senate after an 8-hour Democratic filibuster, but House legislators were getting skittish. Bill proponents were having a hard time answering simple questions about why additional restrictions on union dues were needed. Support for the bill dwindled with each test vote.
“Paycheck deception” passed the House by a narrower than expected margin, and Speaker Jones prepared to move on to “right to work.” But Gov. Jay Nixon vetoed paycheck deception, calling it unnecessary. By the September veto session, too many moderate Republicans had abandoned the effort, and the bill died outright.
Did Republicans get the message? Absolutely not. In December special session centered around tax incentives for Boeing, a small group tried and failed to insert “right to work” language. ALEC member Rep. Eric Burlison (R-Springfield) called it “a good opportunity to begin that fight” ahead of 2014.
In Ohio, the anti-union effort has centered around gathering petitions to get “right to work” on the 2014 ballot. As we know, you need to get a certain number of signatures to get an issue on the ballot. For Ohio, that number is 385,000, and you always want extra signatures in case some are validated.
The Tea Party group Ohioans for Workplace Freedom started circulating petitions in February 2012. After 20 months, they announced they have collected 100,000 signatures.
At this rate, as Ohio bloggers at Plunderbund noted, the anti-union group would need 40 m0re months to put “right to work” on the ballot. And since they’ve already burned through $118,000 in paid petition gatherers, chances are they’d run out of money first.
Let’s compare that with 2011, when Gov. John Kasich and Republicans in the legislative rammed through the union-busting Senate Bill 5. The bill passed on March 30. On June 29, after only 3 months, We Are Ohio delivered 1.3 million signatures to the Secretary of State to get a repeal of SB 5 on the ballot. In November, SB 5 was repealed by 60 percent of voters.
What’s going on here? What the Tea Party and the anti-union forces in Ohio don’t get is that once you get past a small group of billionaires and right-wing ideologues, there is no desire to restrict collective bargaining in Ohio. None. People are looking for good jobs, affordable health care, and decent schools to send their kids.
Meanwhile, the 2011 battle over Senate Bill 5, largely ignored by the national media, still reverberates throughout the Buckeye State. Treasurer Josh Mandel, a Republican supporter of SB 5, lost a Senate bid despite more than $19 million in outside aide. Mitt Romney haplessly flip-flopped on SB 5 and consistently delivered an anti-union message, lost in Ohio in part because of union members of all political stripes voting for his opponent. And in 2013, SB 5 supporter Toledo Mayor Mike Bell was ousted, while a Tea Party-backed pension-cutting amendment was rejected in Cincinnati by a 57-point margin.
In Oregon, the story is even shorter. An Portland attorney named Jill Gibson Odell is sponsoring a “right to work” initiative in her state. Odell is excited about the “national money to be had” to assist her campaign, so she’s not even pretending “right to work” is something Oregonians themselves want. In 2013, little to no progress was made on getting the issue on the ballot, and popular Gov. John Kitzhaber said he will publicly oppose it. Meanwhile, workers in Portland got paid sick days, and a statewide sick leave ordinance is expected to pass in 2014.
What to expect in 2014? Well, as the AP reports, the main targets for “right to work” proponents are Missouri, Ohio, and Oregon, showing that these folks have learned nothing from the past year. While their efforts stall, Americans of all political persuasions are starting to support minimum wage increases, sick leave, wage theft protections, and progressive tax codes in increasing numbers.
Working America will be vigilant to mobilize against any “right to work” measure, wherever it crops up. But make no mistake: Michigan wasn’t the start of a domino effect. It was a wake up call. And outside the right-wing think tank bubble, American workers are fully awake.
Photo by detroitfreepress on Instagram
Tags: ALEC, Eric Burlison, Jay Nixon, Jobs, John Kasich, john kitzhaber, Josh Mandel, Michigan, Mike Bell, Missouri, Mitt Romney, Ohio, Oregon, Paid Sick Days, paycheck deception, Right to Work, Rights At Work, SB5, Tim Jones
Another great win emerges from autoworkers and industry collaboration. General Motors Co. (GM) will invest more than $1.3 billion to upgrade and expand five manufacturing plants in Michigan, Ohio and Indiana that also will create or retain more than 1,000 jobs, GM and the UAWannounced Monday.
UAW Vice President Joe Ashton, who represents GM workers, calls the investments a “win for American workers.” He says:
The UAW is proud to be a part of this successful collaboration with GM that has helped rebuild the nation’s economy, created good paying, union jobs in communities across the country and brought manufacturing that was moved overseas back to the United States. This is further proof that collective bargaining works.
In 2011, when the UAW negotiated new contracts with the Big Three automakers, the union won commitments from General Motors, Ford and Chrysler to invest more than $27.3 billion in their plants, creating 20,000 new jobs at the three automakers and thousands more in the industries that are part of the auto manufacturing supply chain.
At the ceremony at GM’s Flint, Mich., truck assembly plant announcing the investment, GM North America President Mark Reuss told the cheering workers:
These investments are a sign of our confidence in our workforce and our UAW partners that have given and tried so hard and in our vehicles and the continued demand for excellence in each one of these products. You earned this.
Since the auto industry was on the verge of collapse during the Bush recession, car makers and the UAW have worked closely in forging a partnership that was instrumental in securing the financing in 2008 and 2009 that kept the industry alive. Working together not only kept the auto industry afloat and saved tens of thousands of jobs, the negotiated investments like Monday’s GM announcement have opened the doors to good middle-class jobs.
Ashton notes that while income disparity grows in the country and the middle class declines, collective bargaining has created a ladder to the middle class for millions of America’s workers.
This announcement today is further proof that collaboration and collective bargaining works and will continue to be the way that we rebuild America’s middle class.
At the Flint ceremony, Barry Campbell, chairman of UAW Local 598, said he was “proud to pay my union dues, and this is just a great example why.”
GM’s nearly $1.3 billion investment includes:
- $600 million in Flint Assembly for facility upgrades.
- $493.4 million in Romulus (Mich.) Powertrain Operations.
- $121 million in Detroit-Hamtramck Assembly for a logistics optimization center.
- $30.6 million in Toledo Transmission Operations for increased capacity for an existing six-speed transmission.
- $29.2 million in Bedford (Ind.) Castings, which includes $22.6 million to produce components for transmissions.
For more on the success of the labor-management partnerships in the auto industry, read Labor Secretary Thomas Perez’s recent article on the UAW and Ford working together. Perez says that is just one example of how:
Across the country, creative labor-management partnerships are saving and creating jobs, keeping businesses competitive, growing the middle class and helping more Americans climb ladders of opportunity.
Reposted from AFL-CIO NOW
Tags: aflcio, auto workers, general motos, Indiana, Michigan, Ohio, uaw
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.
Tags: Detroit, kevyn orr, Michigan, pensions, Rick Snyder, Right to Work, Rights At Work, secure retirement
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 benefits. A 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
Tags: Detroit, kevyn orr, Michigan, pensions, public workers, Rick Snyder, Wall Street