$600M Flint water crisis settlement is more than the state has paid out for the last decades' worth of lawsuits combined
Updated: Aug. 19, 2020, 10:05 p.m. |
5 years of Flint water crisis
Emily Lawler | elawler@mlive.com
The state is expected to announce a $600 million settlement in civil cases filed by Flint residents over the city's water crisis, a number that far outpaces other large lawsuits settled by the state in the last decade.
Flint City Councilman Eric Mays said the $600 million settlement, details of which would be announced soon, is "primarily going to the kids" who have claimed in lawsuits in state and federal court that they were poisoned by city water while state-appointed emergency managers were running the city.
Related: $600 million settlement likely coming in Flint water cases, councilman says
A $600 million settlement would be a historically large one for the state. According to data from the Senate Fiscal Agency, it's more than the $546 million the state has paid out in court judgements and settlements for every lawsuit against it, combined, in the last 10 fiscal years for which data is available.
The money would need to be appropriated through the state legislature, according to a source briefed on the settlement but not authorized to speak publicly.
There is an existing fund the state sends money it wins from lawsuit settlements into and sometimes pays small settlements out of, but it will not cover a settlement of this magnitude, the source said.
The state's "rainy day fund," which covers emergencies like a shutdown, is hovering around $850 million after the legislature and governor recently withdrew from it to plug holes in the current-year budget caused by the coronavirus crisis.
The crisis has impacted state revenues. At the state's May semi-annual Consensus Revenue Estimating Conference, officials concluded the state has billions of dollars less than anticipated in previous estimates. Officials are expected to update that estimate at a meeting next week.
The state's total budget hovers around $58 billion, but much of that number is federal money or in dedicated funds that can only be used for specific things. The state's General Fund is the most discretionary money at the legislature's disposal and clocks in at $10 billion.
It's not clear, yet, where the $600 million would come from.
House Appropriations Committee Chair Rep. Shane Hernandez, R-Port Huron, said he had not been briefed on the settlement but pointed out the state is already facing a budget shortfall due to revenues declining during the coronavirus pandemic.
"Obviously, we already have budget challenges. I'm sure that there will be conversations about rainy day fund and other options," he said.