Bernero on Bankruptcy: 'Detroit provides a lesson for us all'

By: Josh Sidorowicz Email
By: Josh Sidorowicz Email

Lansing currently finds itself dealing with many of the same issues that lead Detroit to where it is today.

The issues range from aging infrastructures to declining revenues and increased legacy costs, said Lansing Mayor Virg Bernero.

Bernero said these problems are being faced in countless cities across the country.

But when asked if Lansing would ever face a similar fate to Detroit, Bernero didn't hesitate in his response.

"It ain't happening here, let me clear, I've seen to it," he said.

Bernero said the situation in Detroit provides a learning opportunity for other cities, including Lansing.

"We don't have to have bankruptcy," he said. "I think that this is instructive and I think there are lessons here for us."

When comparing Lansing and Detroit, Bernero said there is a key difference between what happened in the Motor City and what's currently being done in Lansing.

"We're not burying our heads in the sands and we're not waiting for the state to come in and appoint an emergency manager because we appointed our own team," he said.

The city implemented a Financial Health Team in 2012 to review the city's financial health to make recommendations for future fiscal spending.

"We're not just going to hope and wish that things are going to be better in 10 years from now," Bernero said. "We're going to take the steps to ensure that we're in good shape."

Currently 28 percent of Lansing's general fund annually goes toward covering retiree costs and liabilities. The city faces about $600 million dollars in unfunded liabilities, which is money the city will spend on legacy costs for the next several decades.
In comparison, Detroit faces nearly $20 billion in unfunded liability costs for some 30,000 retirees.


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