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Fri March 23, 2012
Detroit unions agree to pay cuts amid city's financial crisis
In a deal announced today, a coalition of unions representing thousands of Detroit city workers said their members approved 10 percent pay cuts and other changes.
The Associated Press reports "the deal announced Friday affects at least 4,500 workers and still needs approval from the city council."
It does not cover the unions representing Detroit police officers or Detroit firefighters. Those unions are in separate talks.
Absent cuts or added revenue, the city is expected to run out of cash sometime in April.
The cuts are intended to hold off a state takeover of Detroit through the appointment of an emergency manager, or though a consent agreement.
The Detroit Free Press reports the question of whether these cuts are enough remains to be seen:
Under the current agreement, the city would save about $54 million a year in concessions — less than half what Mayor Dave Bing originally wanted.
Other savings include $14 million in layoffs and about $100 million in new revenue by aggressively collecting past due taxes and parking tickets, but those were plans already underway before the negotiations.
An attorney who assisted in the negotiations for the coalition of unions, Richard Mack, said "we are going to make sure the city gets back in the black within a year."
Michigan Governor Rick Snyder wants to hear recommendations on Monday from the state's financial review team about whether the state should step in with either an emergency manager or a consent agreement.
But the legality of the review team is getting tangled up in the courts. An Ingham County judge found that the state's review team violated the Open Meetings Act. The state appealed the ruling, which is now being reviewed by the appeals court.