Jan 16 The Detroit City Council on Wednesday
continued its offensive against a possible state takeover of the
city by passing a cost-cutting measure sought by Mayor Dave Bing
for his reform agenda.
A majority of the nine-member council has been approving
contracts and measures in recent weeks to fill Detroit's
near-empty coffers and aid efforts to restructure city
operations. Meanwhile, a review team appointed by Michigan
Governor Rick Snyder could recommend at any time that the city
should have an emergency financial manager, who, if appointed,
could recommend that the city file for bankruptcy.
A Chapter 9 municipal bankruptcy filing by Detroit would be
the largest ever in the United States.
"We're in a crisis and if we do nothing to save $90 million,
the state's going to come in and do it and it's going to be a
lot worse with respect to our employees," said Council President
Pro Tem Gary Brown at a public hearing on Wednesday ahead of the
The city of 700,000 has been hit by a steep decline in
population, years of severe budget deficits and escalating
PENSION FREEZE, PAY CUTS
The council approved a pension freeze that suspends accrued
benefits for nonunion employees for a year. Another measure
sought by Bing - which would force up to 20 percent in pay cuts
on nonunion workers in the city's executive and legislative
branches through unpaid furlough days - was amended by the
council to 10 percent. A vote on the amended ordinance will be
held later this month, according to a council official.
On Tuesday, a majority of the council agreed with a Bing
plan to increase nonunion employees' share of healthcare costs
to 30 percent from 20 percent.
City council members said similar cost-cutting measures for
unionized workers would be negotiated with the labor unions.
The mayor on Wednesday announced an amnesty program for
delinquent income tax payments owed by individuals and
businesses in 2011 and prior years. The program, which begins
Jan. 22 and ends Feb. 16 and is expected to raise $4 million, is
also targeting nonresidents who travel to Detroit to work,
including professional athletes and entertainers.
"The city will not be writing off delinquent balances," Bing
said in a statement. "After the amnesty period, we will take
more aggressive collection actions including providing
delinquent reports to credit agencies."
The program is part of a plan by Bing to generate an
additional $50 million for the city this year by collecting
unpaid fees, fines and taxes and selling unused property and
Last week the city council approved some contracts required
by Michigan officials and Bing's request to remove Krystal
Crittendon from her position as the city's corporation counsel.