Detroit Financial Board OKs Plan For Union Cuts
DETROIT (WWJ/AP) – A board created to help Detroit Mayor Dave Bing repair the city’s broken finances has approved his plan to make more than $100 million in cuts to the unionized workforce.
The financial advisory board on Thursday took its first major steps toward restructuring the city’s finances. The plan calls for putting in place savings that include a 10-percent wage cut and significant changes to health care and work rules.
Most are similar to tentative agreements reached earlier this year with unions.
Union concessions are a big portion of Bing’s budget proposal that was approved by City Council, which calls for $250 million in savings and cuts about a third of the city’s 11,000 member work force.
The pay cut for many unionized workers will take the place of furloughs implemented in previous years, meaning workers will get the pay cut without the time off.
Board member Darrell Burks said the cuts initially will affect only about half of the city’s unions working under expired contracts. He added that the cuts will not take effect for the remainder until their contracts expire at various times in 2013.
The City Council is expected to consider the plan next week, but the financial board can implement the actions without council’s approval.
More cuts could be coming, too, including an end to retiree vision and dental coverage in 2013.
The city’s 10-page summary of the plan was released at a meeting of the financial advisory board, made up of city and state appointees charged with repairing the city’s finances.
The nine-member board was formed under a consent agreement between the city and state. Before the consent agreement was reached, Detroit was on course to be more than $400 million in debt, and was reportedly on the brink of bankruptcy.
TM and © Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press contributed to this report.