Jul
19
2013

At this rate, they’ll soon be forced to burn down Detroit for the insurance.

I have been told that the below is actually the case:

[Ingham County judge Rosemarie Aquilina] says Thursday’s historic Detroit bankruptcy filing violates the Michigan Constitution and state law and must be withdrawn.

[snip]

Lawyers representing pensioners and two city pension funds got an emergency hearing Thursday with Aquilina, and she said she planned to issue an order to block the bankruptcy filing. But lawyers and the judge learned that Orr filed the Detroit bankruptcy petition in Detroit 5 minutes before the hearing began.

Aquilina said the Michigan Constitution prohibits actions that will lessen the pension benefits of public employees, including those in the City of Detroit.

I think that it’s this clause that the judge is referring to:

§ 24 Public pension plans and retirement systems, obligation.

Sec. 24.

The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby.

Financial benefits arising on account of service rendered in each fiscal year shall be funded during that year and such funding shall not be used for financing unfunded accrued liabilities.

…danged if I know how this will play out, or what to say about the situation. Except to note that Robocop is looking better and better every day…

Moe Lane

8 Comments

  • midwestconservative says:

    Don’t you just love Public Worker Unions, they’ve so far managed to kill several cities in California, and now Detroit, thought to be fair Detroit has been a Dead Man Walking for quite some time now.

  • Finrod says:

    That law sounds like something the state government needs to address. Doesn’t Michigan have a Republican governor and statehouse now?

    • acat says:

      Why would the State want to pick up the check for Detroit’s party, Finrod?
      .
      I am, however, watching for Obama to do something stupider than usual on this… perhaps I should be happy that he’s distracted by Trayvon.
      .
      Mew

    • Freddie Sykes says:

      The Michigan Republicans do not have the two thirds majority needed to amend the constitution.

  • BigGator5 says:

    OCP is starting to look like the good guys, no?

  • Subotai Bahadur says:

    I have a feeling that County Circuit Judge Acquilina is going to get a sudden education. Bankruptcy law is exclusively Federal. Article I, Section 8, Clause 4. Which pre-empts state law.

    However, if Acquilina makes the charges of lèse majesté and sacrilege stick, we are in for some interesting times.

    Subotai Bahadur

  • Freddie Sykes says:

    The Michigan constitution may say that Detroit can’t reduce public employee benefits but doesn’t say where it will get the money. Public employees pension plans are not required to meet ERISA minimum funding requirements and not insured by the PBGC. The judge(s) may be able to keep the city in chaos but, without an orderly bankruptcy procedure, the money will run out and the benefit checks will bounce.

    Fasten your seat belts, it’s going to be a bumpy night!

  • bobby b says:

    If the judge is going to depend on that particular clause, she’s going to have to figure out who is going to take the fall for violating this part of it:

    “Financial benefits arising on account of service rendered in each fiscal year shall be funded during that year and such funding shall not be used for financing unfunded accrued liabilities.”

    All those years when Detroit chose to buy more fun stuff instead of making deposits into the pension accounts, the city officials were violating that provision. The present situation was caused by those violations.

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