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Let's get details on this developing story.
Joining me now live from Lansing is Michigan governor, Rick Snyder.
Governor, thanks for being here.
-Happy to be with you.
-Governor, Detroit, we know, as a city, spent $100 million more than it took in every year since 2008 on average, borrowing the rest.
The Wall Street Journal calls this a long sad decline.
You had to make the final decision on this bankruptcy.
Did-- Were there any other options? -No.
This is a-- There were no other viable options and I view this as an opportunity to say, "Let's stop the decline." This is a situation that's been a period of decline of 60 years in Detroit and it's resulted in $18 billion of debt that the city can't afford to pay, and more importantly, it's resulted in services that are not good nor appropriate for the wonderful people of Detroit.
To give you one illustration, response times for police in the city of Detroit are 58 minutes.
The national average is 11 minutes.
I respect the citizens of Detroit and they deserve a better answer.
And one way to do that is to go through this difficult process, but to use bankruptcy to say, "Let's do a plan for creditors, but also a plan to invest more in services to citizens and grow Detroit and let's get on a positive path." -Fifty eight minutes.
Well, Detroit has the highest violent crime rate for a city with more than 200,000 residents according to the FBI.
Governor, I guess the question a lot of people have is when the president and the administration talked about the success of the Big Three automakers.
Why did that not translate to Detroit at all? -Well, it has helped Detroit.
Again, if you look at it, the auto industry is an important part of Detroit and for Michigan.
We're proud to be the auto capital of the world and they have hired more people and their improvement is fabulous.
I think, if anything, when you talked about the situation with the auto companies, it shows that bankruptcy done appropriately in a thoughtful fashion can be a tool, not to say it's gonna continue to climb, but it could be a basis for comeback and that's what I expect to see in Detroit is.
Let's use bankruptcy in an effective fashion.
Let's follow the process in a legally appropriate way.
Come out of this with a stronger Detroit that then can growl which will help all of Detroit and all of Michigan.
-Mike Tobin just reported about the possible fights that lie ahead in this bankruptcy process and that the judge will decide as each group makes its plea to how much money it's going to get.
I mean, there's some reporting that municipal-worker retirees are said to get less than 10% of what they are owed.
That's potentially a big problem.
-Well, I wouldn't speculate on that.
That needs to be addressed over a longer period of time, but one thing I would say is the bankruptcy really doesn't challenge funded pension benefits and there is significant funding in some of the plans.
They're not fully funded by any means, so the real dispute will be over the unfunded portion of the pension liability to the degree they're funded, those benefits continue.
So, it really comes down to the unfunded portion, and unfortunately, in Detroit, there was a lack of contribution, there were multiple cases of mismanagement that went on for a long period of time with respect to pension liabilities in Detroit.
-Last thing, governor.
Do you think that this case of the city of Detroit is something that the rest of the country can learn from? It seems there are a number of cities and municipalities on the brink here.
-Well, it is something that other places hopefully can learn from.
Hopefully, many places don't have to go through this experience because this is a very difficult painful thing.
I'm doing this out of a deep respect for the citizens of Detroit.
They're my customers and I wanna give them great service and to the other people of the state of Michigan and this is-- one way to do it is to say, "Here's a tool because there are no other viable options to give us a fresh start to say let's address this debt question, and most importantly, let's address this better services to citizens because a lot of great things are going on in Detroit.
Young people are moving to Detroit.
The private sector, the foundation community are doing great things.
The city government is hopefully the last obstacle and really seeing Detroit have a breakout opportunity in the positive sense.
-Governor Synder, thank you very much and good luck.
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