Michigan governor Rick Snyder signed off on a "grand bargain" bill in Detroit on Friday, aimed at reducing cuts to the bankrupt city’s pensioners and saving its historic art gallery.  The bill is a major step forward for the city’s plans to address its financial crisis but faces several tests before it can be approved. Michigan will give the city $195m into funds earmarked for retirees alongside another $366m from foundations including the Kresge, the Kellogg Foundation and Ford Foundation and a $100m pledge from the Detroit Institute of Arts (DIA).  The deal will also prevent other creditors from forcing the sale of DIA’s city-owned collection which includes Van Gogh’s Self Portrait, Bruegel’s The Wedding Dance, and works by Monet, Degas and Rembrandt that Christie’s has valued at $900m.  “This is not an easy thing,” Snyder said. He said sacrifices would still have to be made but “with the grand bargain there’s an opportunity to ask them to sacrifice less.”  Snyder authorised Detroit’s bankruptcy, the largest municipal bankruptcy in US history, on 19 July last year. “On that day I told someone that when they write the history books on the city of Detroit this may be viewed as the lowest point in the history of a city that is a couple of hundred-plus-years-old,” he said.  “It was one of those decisions that I believe was the right decision to make because if I hadn’t made that decision the day after 18 July would have been even worse, the day after that even worse and the path of going down hill would have continued.”  Shirley Lightsey, president of the Detroit Retired City Employees Association, said the deal would mean a cut of 4.5% to benefits instead of 27%. She said retirees were still “not happy” to give up benefits they had earned but after a year of negotiations it was “now time to use the wisdom and discernment that we sometimes don’t use. There is no other way to recommend to our retirees accept for a yes vote.”  Pensioners have until 11 July to vote on the deal and if enough of them approve, the grand bargain will be reviewed by judge Steven Rhodes at a massive bankruptcy trial that is due to start on 14 August.  Bond insurers and other creditors have objected to the grand bargain deal. Last month Rhodes ruled against them when they went to court asking for DIA’s art to be taken from its walls so that they could be better assessed.  The governor signed the legislation at the old Globe Building on the Detroit riverfront, where Henry Ford is believed to have worked in his youth. The building was vacant for 20-years but is being restored as an outdoor adventure centre. Snyder signed the documents on a table he said cost $5. “We wanted a desk that matched the theme,” he said.
Rick Snyder signs off on plan would save Detroit's art collection and reduce pension cuts, a major step to addressing the crisis