Lost in the shuffle of affairs in Ireland, the Detroit News reports Hamtramck seeks state permission to file for bankruptcy
The city of Hamtramck, desperate for cash, has asked the state for permission to take an unprecedented step: filing for bankruptcy.
City Manager Bill Cooper said the city of roughly 20,000 people is staring at a $3 million deficit, fueled by a dispute with Detroit. Unless Hamtramck files for bankruptcy, it won’t be able to pay its nearly 100 employees or 153 retirees, he said.
Many Michigan municipalities are under severe financial pressure following a crippling recession that has seen tax revenues plummet. The Detroit Public Schools considered bankruptcy last year but opted against it.
Caleb Buhs, a Department of Treasury spokesman, said the department received the letter Monday and officials are studying it. Under a 1990 law, only an emergency financial manager appointed by the state can take a city into bankruptcy, he said. No Michigan municipality has declared bankruptcy before or since the law was passed, he said.
Bill Nowling, a spokesman for Gov.-elect Rick Snyder, said Snyder is monitoring what he believes is a growing problem in Michigan.
“The issue right now is to get a handle on exactly how many municipalities out there are at the point where Hamtramck is,” Nowling said. “There are probably several that are sitting on the bubble.”
Nonunion employees have taken a 5 percent pay cut and are paying 15 percent of the health care premiums for spouses and families. The union employees have not agreed to those provisions, and Cooper said a bankruptcy filing could help “force the unions to the table.”
In his letter to the state, Cooper said the city has approached the police, fire and municipal unions on several occasions and won only minimal concessions. Moving “quickly to bankruptcy,” Cooper wrote, would allow the city to “set aside” the current union contracts and solve the budget problem.
“While this step may seem radical in its approach, it is the only approach that will quickly and effectively allow us to address our shortfall,” he wrote.
I commend the approach of Hamtramck city manager Bill Cooper. The public unions have bankrupted the city and numerous other cities in Michigan and elsewhere.
Moreover, I await the bankruptcy filing for a major city like Houston, Miami, or Los Angeles, all of which are without a doubt “walking dead”. The sooner they file bankruptcy the better off all of those cities will be.
Mike “Mish” Shedlock
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