Michigan House Steps Up and Supports $195 State Settlement in Detroit Bankruptcy

**corktownyuppie** · May-22-14, 04:41 PM

The vote was 103-7. The 7 holdouts are Democrat reps.

http://www.freep.com/article/2014052...oit-bankruptcy

**corktownyuppie** · May-22-14, 04:45 PM

Edit: there were 11 bills in total. They range from 105-7 vote to a 66-44 vote. Bottom line: they got it done.

http://www.nextchapterdetroit.com/05...ichigan-house/

**bailey** · May-22-14, 04:46 PM

I really don't get the hoopla over the DIA bill. If the millage was a one time, 10 year thing like DIA claimed it was to be when they sold it to everyone.....why all the outrage over a bill re-stating it?

**Dan Wesson** · May-22-14, 05:48 PM

Is this the package that the Koch Brothers group was opposed to?

If so, then them folk were a day late and a dollar short.

**ferndalien** · May-22-14, 06:40 PM

Originally Posted by bailey

I really don't get the hoopla over the DIA bill. If the millage was a one time, 10 year thing like DIA claimed it was to be when they sold it to everyone.....why all the outrage over a bill re-stating it?

My problem with it is that it's yet another thing the legislature has decided we the people are not qualified to vote on. Yes, the millage was proposed and passed as a one-time, 10-year package. But a lot can change in 10 years, so what if there's a genuine need to continue it 2022?

Repeal the EM law? Fine, we'll put it right back and make it referendum proof. Want to vote on minimum wage? Nah, we'll repeal that law before you can vote on it. It's a pattern, and it subverts the will of [[at least some of) the people, and it flies in the face of democracy.

**bailey** · May-23-14, 05:33 AM

Originally Posted by ferndalien

My problem with it is that it's yet another thing the legislature has decided we the people are not qualified to vote on. Yes, the millage was proposed and passed as a one-time, 10-year package. But a lot can change in 10 years, so what if there's a genuine need to continue it 2022?

Repeal the EM law? Fine, we'll put it right back and make it referendum proof. Want to vote on minimum wage? Nah, we'll repeal that law before you can vote on it. It's a pattern, and it subverts the will of [[at least some of) the people, and it flies in the face of democracy.

and the people can elect a legislature who will change the law if it's that important. I guess what I'm saying is if this tantrum is the most the Koch brothers can buy, then I'm fine with it.

**Danny** · May-23-14, 07:38 AM

A 195 million dollars, I thought Detroit is getting 225 million dollars.

WOW! if the U.S. Government can bail out banks, General Motors and Chrysler. I'm sure that Lansing can bail-out Detroit. I can't believe I to say this, but [[mumbling!) Thank you, Snyder.

That will save his political career. But I'm still not voting for him!

**corktownyuppie** · May-23-14, 09:19 AM

Originally Posted by Danny

A 195 million dollars, I thought Detroit is getting 225 million dollars.

Believe it or not, it's actually both. Financial math gets a little abstract and difficult to explain without pictures, but I'll give it a go. If you could choose between me giving you $1,000,000 vs. $50,000 which would you rather have?

Obviously, the $1 Million, right?

But it gets tricky. What if the $1 Million in payments was spread over 100,000 years. I'll give you $10 per year for 100,000 years. Now which would you rather have? The $1,000,000 spread over 100,000 years? Or the $50,000 today?

Obviously, the $50,000 today.

So that's why the differing numbers. The amount agreed in the settlement might have been $225 Million [[though someone check, I'm not sure if that is right). But that amount was going to paid over the next 20 or 30 years.

They had some people do the calculations and arrive at the conclusion that if we took $195 Million today, earned 4% interest every year [[approx $8 Million per year), then the amount we'd be getting over the next 20 years is equal or better than the original $225 Million.

It's even more complex than that, but I'd say that concept is enough to get the basic picture. And more importantly, it can help eliminate any rumors about Detroit getting screwed out of the $225 Million they were promised in the negotiations.

Ah...financial math.

**coracle** · May-24-14, 09:06 AM

corktownyuppie;
Where does the 4% interest rate come from? Do taxes have to be paid on the interest? What happened to the $350M originally "promised" [[or have I got that wrong?)? If the $195H is going to be used gradually won't the Interest per year diminish? If it's just going to sit in a bank to accrue interest there's no need to transfer it and risk it being spent on what it was not intended for.