Snyder last summer: State won't issue Detroit funds to payoff debt

Jun 4, 2014 at 12:03 pm

(source: Wikimedia Commons)

Gov. Rick Snyder said today that no other Michigan city should expect to receive financial aid from Lansing similar to a packaged approved for Detroit.

The question came up after reporters peppered the Republican governor about the potential scenario of Flint filing for bankruptcy, and if Lansing would pony up a financial cushion, to which Snyder said: "I expect people to ask, but the answer is no."

Flint officials recently signaled the city may have no other option but to seek court protection. In Pontiac, similar to Flint, officials have said an ongoing court battle over retiree health care costs could tip the city into bankruptcy.

Though his message may unnerve the dozen Michigan cities under financial distress, it's worth noting Snyder sang a different tune just last summer on Detroit's woes. The governor didn't support the idea of sending Detroit money to pay off debt, especially when the state had already committed money for infrastructure projects in the city.

I am committing state money, but I'm not doing it in terms of just paying a bailout to pay off debt -- it's on focused projects," Snyder said. "I view it as how we can put state resources toward better services to citizens, not simply debt service."

Then, there's Snyder's remarks on Detroit filing for bankruptcy in the fall of 2012, something we examined at the time The B-Word seemed almost-inevitable: "Detroit's not going into bankruptcy," the governor said around the time the state was, at the very least, talking about such a scenario.

But, as early as 2010, Snyder signaled he supported some form of state-assistance for Detroit.

"It depends on the terms," Snyder said. "If it's just solving a short-term problem to buy someone some time, no. If it's structurally there to develop a long-term plan where we're not putting at risk the other citizens of our state in a sound financial manner, the answer is yes."

What does that mean? Well, likely, it means the state may need to address how cities collect revenue, something the Free Press addressed in a lengthy editorial last month. Without it, the Freep's editorial board wrote, more cities -- like Flint and Pontiac -- could very well follow the path of Detroit. So, even if Snyder's unwilling to speculate about the possibility of other cities facing the prospect of bankruptcy, then perhaps it's time to heed the Freep's advice.