DETROIT (WWJ) – Saying the city could run out of cash by April and have a $45 million deficit by the end of June, Mayor Dave Bing Wednesday outlined his plans to resolve Detroit’s fiscal crisis.
Those plans include city workers taking a 10 percent pay cut, paying 10 percent more for benefits and foregoing their furlough days, city retirees paying more for benefits and businesses paying more taxes.
“Simply put, our city is in a financial crisis and city government is broken. That’s not new. That’s not an opinion. That is a fact,” said Bing, whose address at the Northwest Activities Center was heard live on WWJ Newsradio 950.
As he did before union leaders last week, Bing outlined five concessions that could save the city $40 million this year.
— Elimination of furlough days for all city employees with implementation of a 10 percent across the board wage cut.
— Changes to existing healthcare coverage including a 10 percent increase in employee contributions to their coverage.
— Pension reforms that will make the city more competitive with other municipal plans including reducing excess payouts from the system.
— Reform our work rules that will reduce overtime costs and streamline operations.
— Additional strategic layoffs will also be necessary given the city’s fiscal position.
“This is not an attack on labor or our dedicated employees,” the mayor said. “The private sector including the auto industry was forced to accept tough cuts to survive. The terms we are asking for are no different than what most Detroiters receive at their places of employment.”
Bing also wants the city’s 22,000 retirees to pay more for their healthcare coverage and accept pension reforms in hopes of saving eight million dollars.
City contractors and businesses will also be affected. The mayor said the city will implement a 10 percent pay cut for city contractors and effective January 1, a tax rate increase of less than 1 percent will be in place for corporations in Detroit.
The mayor also urged Governor Snyder and the state legislature return revenue sharing funds that were supposed to be guaranteed when the city lowered its city income tax. The city has lost more than $220 million, according to Bing.
–Saying he doesn’t want to cut “boots on the street,” the mayor called for City Council to approve a contract for Shot-spotters which is a technology used to solve and prevent murders. The contract would be funded by drug forfeiture money and grants. While he said crime is down more than 10%, murders are up almost 20 percent from last year. “It is an epidemic and we must do more to keep people safe,” the mayor said.
–Saying too many kids are late for school, workers late for their jobs and others simply stranded and frustrated, Bing said he is implementing a number of steps to put at least 25 additional buses a month on the streets. The steps include having bus mechanics work around the clock to fix buses, eliminating furlough days for mechanics, and ensuring that the necessary parts are available. In addition, the mayor says the city has started the process of selecting a new management firm.
–Saying “we need a lighting system that works in Detroit, the mayor said the city has begun discussions with private utilities that could make investments in public lighting. “Transferring PLD (public lighting department) responsibilities to a private entity is the long-term solution we need to provide residents a well-lit city,” Bing said adding the city doesn’t have the $300 million dollars needed for capital improvements or the “know-how necessary to fix the lights.”
Bing closed his speech asking”every Detroiter and all who care about this city to stand with us and work with us to keep Detroit our city.” He said there are many positive things happening in the city and the image is changing for the better.
“The apathy that has paralyzed Detroit for decades ends tonight,” he said. “All of us have something to contribute to this effort.
“Detroit has always had the will to survive. We must once again stand up as a community and work together. Addressing this fiscal crisis head-on is the only way to save our city.”