Duggan to lawmakers: End state oversight in early 2018

Michael Gerstein
The Detroit News

Lansing — Detroit Mayor Mike Duggan told a House panel Wednesday that the city could meet requirements to end the state’s financial oversight next year and urged lawmakers to do something about the city’s high auto insurance costs.

“It’s gonna happen,” Duggan said.

The city has eliminated $7 billion in liabilities of its $18 billion in debt and obligations after emerging from bankruptcy in 2014. The state-appointed Financial Review Commission — which oversees all major Detroit and labor contracts — was created amid the bankruptcy to ensure the city’s recovery was handled well handled.

But Duggan said the state oversight is gumming up the works because all major city and labor contracts are delayed 30 days awaiting for approval from the state commission.

He and John Walsh, Gov. Rick Snyder’s director of strategy, told lawmakers on the House committee that the city’s “grand bargain” deal to use hundreds of millions of dollars in state and private philanthropy aid in part to reduce pension cuts to city retirees has helped with trimming unemployment, slowing population losses and encouraging development projects.

Walsh, a former state representative from Livonia who helped get $195 million in state aid approved for Detroit, said the city is “well managed.”

“It wasn’t just broke. It was broken,” he said about Detroit. Now, Walsh said the city is on its way to better times.

As evidence of the city’s recovery, Duggan stressed to lawmakers that thousands of street lights have been installed, blighted houses have been demolished, emergency response times have improved and buildings revitalized.

The mayor continued his lobbying of lawmakers to address high auto insurance costs.

“If you can’t afford the car insurance you either drive to work illegally or you lose your job,” Duggan said.

“People are being ripped off,” he said, because of rising health care costs associated with auto insurance that hikes overall rates.

Duggan made the comments a day after the filing deadline for the mayoral election. Twelve residents have submitted petitions to run against the incumbent, while the only other certified candidate on the ballot besides the mayor is state Sen. Coleman Young II, son of the city’s first black mayor.

Walsh said the economic health of Metro Detroit affects the entire state because it accounts for 44 percent of Michigan’s total sales and income tax revenue.

“All in all, I think it was a very successful effort. There are plenty of challenges ahead to be sure,” he said.

mgerstein@detroitnews.com