Going Down in Detroit: Jobs, Budgets, Pensions and Pay
Detroit, The Motor City, is going down one way or the other. The Mayor of Detroit, Dave Bing, announced Friday that he plans to cut 1,000 jobs by early next year to help deal with the city's budget crisis. It's been heard through the grapevine that either the jobs go or a state-appointed financial manager takes over the city of Motown.
The exact personnel laid-off are to finalized on December 5, 2011. By the third week of January, about 9 percent of the city's employee will be sent notices of termination. The Mayor says that the Police and fire will be the least effected.
Mayor Bing said that the city faces a $45 million cash shortfall by the end of its fiscal year in June. This 1,000 new job losses is on top of the 2,000 job losses that were eliminated in 2009 and 2010. In addition, there is a general hiring freeze on all departments except for the Detroit Water and Sewerage Department.
The most difficult challenge with re-balancing Detroit's budget will be the 10% cuts in employee pay and even deeper reductions in employee pension and health care benefits. If the pension cuts are not agreed to then the next step is the nuclear option: cut police and fireman.
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