(Adds bill changes, possible vote timing, UAW and JPMorgan
commitments; paragraphs 6, 9 and 12)
May 21 A special Michigan House committee on
Wednesday approved a nearly $195 million state contribution for
a key element of Detroit's plan to adjust its $18 billion of
debt and exit the biggest municipal bankruptcy in U.S. history.
Legislation appropriating the money from Michigan's rainy
day fund was part of an 11-bill package the committee approved
and sent to the full House for consideration.
The mostly unanimous votes on the bills by the five-member
bipartisan Committee on Detroit's Recovery and Michigan's Future
marked the first by state lawmakers after Governor Rick Snyder
included money for Detroit in the proposed budget he unveiled in
The legislation, which also creates an oversight commission
for Detroit, must still pass the Republican-controlled House and
"We still have plenty of work to do," said Republican State
Representative John Walsh, who chaired the committee. "Just
because it moved from this committee doesn't mean it's a done
The committee made numerous changes to the bills before
voting, including giving the Detroit City Council an appointment
to the oversight commission and removing a requirement to offer
new city employees 401k retirement savings plans instead of
pensions. The House could take up the bills as soon as Thursday,
according to a spokesman for House Speaker Jase Bolger.
Americans for Prosperity-Michigan, a conservative group
backed by billionaire industrialists Charles and David Koch, is
revving up a campaign against using state money to help Detroit.
Under Detroit's debt adjustment plan, Michigan's lump sum
payment would be added to $466 million pledged over 20 years by
philanthropic foundations and the Detroit Institute of Arts to
ease pension cuts on city retirees and protect art works from
being sold to raise money to pay city creditors.
Also on Wednesday, the United Auto Workers union agreed to
participate in the so-called grand bargain by raising "material
contributions" for retired Detroit worker healthcare costs
without tapping its own funds, according to U.S. Bankruptcy
On Monday, mediators announced the Michigan Building and
Construction Trades Council will also contribute to retiree
All of the contributions are contingent on each other and
require affirmative votes from members of Detroit's two
retirement systems on the debt adjustment plan. U.S. Bankruptcy
Judge Steven Rhodes has set July 24 for the start of a hearing
on the plan to determine if it is fair and feasible.
Apart from the bankruptcy plan, JPMorgan Chase & Co
on Wednesday announced a $100 million, five-year commitment to
spur the city's economic recovery.
(Reporting By Karen Pierog; Editing by Chris Reese and Tom