Legislation introduced yesterday in the Michigan House of Representatives would tie state money key to Detroit's bankruptcy exit plan to oversight and other conditions, Reuters reported today. Detroit's plan for dealing with $18 billion of debt and emerging from the biggest municipal bankruptcy in U.S. history depends on $816 million pledged to ease the impact of pension cuts on retired city workers and avoid a sale of city art work to raise money for creditors. The so-called grand bargain includes $350 million in state money that Michigan Governor Rick Snyder (R) has asked lawmakers to approve. Philanthropic foundations and the Detroit Institute of Arts pledged the rest of the money. Under the legislation, Michigan would make a single upfront payment of nearly $195 million, instead of $350 million spread over 20 years. The money would be taken out of the state's rainy day fund and paid back over 20 years with proceeds from Michigan's share of a national settlement with U.S. tobacco companies.
