In what would be a major step toward resolving Detroit's historic bankruptcy case, Michigan Governor Rick Snyder yesterday unveiled plans to use state funds to help pay for Detroit worker pensions in his proposed $52.1 billion state budget, Reuters reported yesterday. The insertion of the Detroit pension money is Snyder's first official move toward previously announced plans to tap $17.5 million a year over 20 years from the state's share of a 1998 multi-state settlement with U.S. tobacco companies. Last month, the Republican governor proposed adding $350 million in state funds to money pledged by U.S. foundations to help fund Detroit's retired worker pensions and keep city-owned art work out of the bankruptcy case. Pension funds are Detroit's biggest unsecured creditors, and Kevyn Orr, the state-appointed emergency manager running Detroit, has pegged the unfunded pension liability at $3.5 billion. Pension cuts are among options Orr has said he is considering in his effort to restructure Detroit's finances.
