UPDATE 1-Detroit mayor imposes worker benefit, pay cuts

Wed Jul 18, 2012 11:25am EDT


    By Bernie Woodall
    DETROIT, July 18 (Reuters) - Detroit Mayor Dave Bing said on
Wednesday he has imposed 10 percent pay cuts and cuts to
healthcare benefits for city workers in an effort to save the
cash-strapped city $102 million a year.
    The Detroit City Council on Tuesday rejected by a 5-4 vote
Bing's plan for the cuts. But as part of an April consent decree
with the state of Michigan that gave the state more control of
the city's finances, the mayor can impose the cuts without city
council approval.
    "This is a tough day for me, a tough day for city workers
and a tough day for all of Detroit," Bing said in a statement on
Wednesday. "However, it is a necessary day - but it's still a
tough day."
    Some $52 million of the $102 million expected in annual
savings will come from healthcare benefit cuts, Bing's plan
shows. Prior to the cuts, the city's budget deficit stood at
$197 million and its long-term debt at $7.9 billion.
    "I know this represents a hardship and sacrifices for many
city workers," said Bing's statement. "But as I've said before,
I must make the best decisions for all Detroiters."
    One of the city council members who voted in the majority on
Tuesday, JoAnn Watson, said Bing was balancing the budget on the
backs of city workers who had already sacrificed enough while
not being as demanding to the Wall Street banks the city owes.
    Representatives of some of the 48 unions that represent
nearly 11,000 workers said that Bing took advantage of the
financial crisis the city faces to impose new work rules and pay
cuts without negotiations.
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
wyattb wrote:
Oh Boohoo!! Mean old mayor gave us a 10% pay cut. Welcome to the real world pal. People have been giving up one day a week (20%) and have been for the last four years and when the 48 unions and 11,000 workers can’t suckle at the nipple because the milk is drying up they squeal like little pigs. Detroit needs to take a lesson from Scranton PA whose mayor just reduced everybody to minimum wage.

You already have shut off the lights and removed the poles and wires. DETROIT WAKE UP!!! You cannot sustain the bloated bureaucracy you’ve got.

Jul 18, 2012 12:40pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

How to get out of debt

Financial adviser Eric Brotman offers strategies for cutting debt from student loans and elder care -- and how to avoid money woes in the first place.  Video