Flint officials react to Detroit bankruptcy decision

<p>In Flint, 10% of the city's budget goes to employee pensions.</p>

Michigan law is no longer protecting employee pensions.

This, after a federal judge confirmed Detroit is $18 billion in debt and bankruptcy is the only way to move forward.

Federal Judge Steven Rhodes' historic decision not only moves forward with Chapter 9 bankruptcy, it states that Detroit employee pensions would be cut.

A promised paycheck many thought would be protected under state law is now on the chopping block.

"According to the emergency manager, half or more of Detroit's debts are tied up in pensions," said Chris Douglas, UM Flint economics professor.

A federal ruling moves forward with Chapter 9 bankruptcy and threatens Detroit employee pensions.

"That's a contract that can be broken in bankruptcy much like any other contract," said Douglas.

For other struggling cities, Michigan law's inability to protect this "promised paycheck" is unnerving.

"To any city that has potential problems on the horizon, Flint included, if the city files Chapter 9 bankruptcy, pensions are on the chopping block just like anything else," said Douglas.

In Flint, 10% of the city's budget goes to employee pensions.

City officials say legacy costs are the biggest ticket item.

A benefit employees will continue to enjoy for now.

"To be able to get cut deeper with your pensions is something that's impossible to plan for. I mean this was supposed to be a guaranteed benefit," said Flint Firefighters Union Representative, Mark Kovach.

But for thousands of past and present Detroit employees it's now a reality.

"Probably a substantial cut in their pensions maybe ten cents on the dollar," said Douglas.

Officials hope to have a debt restructuring plan presented by early March.