Detroit rejects pay cuts for city workers, but issue not dead

Reuters News
Posted: Jul 17, 2012 3:00 PM
Detroit rejects pay cuts for city workers, but issue not dead

DETROIT (Reuters) - The Detroit City Council rejected by a 5-4 vote on Tuesday Mayor Dave Bing's planned cuts in pay and healthcare benefits for city workers, but they may be imposed anyway.

The financial advisory board appointed under a deal reached in April that gives Michigan greater oversight of Detroit's finances can impose the wage and benefit savings without city council approval, said Ken Whitaker, the city council attorney.

Under the plan, city workers whose union contracts expired on June 30, including police officers, would have their pay cut by 10 percent along with reductions in healthcare and pension benefits.

On Monday, Bing called on the city council to approve the pay cuts immediately. Detroit, Michigan's largest city, has been battling dire financial problems, struggling to close a budget gap as it contends with high unemployment and a severely shrunken population.

"They nickel and dime the hell out of us, and we are the ones who really need those nickels and dimes," said Joe Duncan, president of the Detroit Police Officers Association.

Duncan said the DPOA on Monday filed an appeal to a lower court judge's decision not to extend an injunction that would keep the proposed pay and benefit cuts from taking effect.

Detroit has the highest violent crime rate among big cities in the United States.

Bing's office says the pay and benefit cuts will save Detroit $102 million a year. The city's deficit stands at $197 million, and its long-term debt is $7.9 billion.

Even though the financial advisory board can impose the cuts without approval by the city council, union representatives on Monday implored council members to send a message to Bing and the advisory board by rejecting the plan.

The financial advisory board approved the proposed cuts last week.


Some $52 million of the savings to the city would come from healthcare, with city spending for each covered worker dropping to $6,711 from $9,487.

Workers would have to pay more for insurance premiums and a higher share of any medical bills.

A wider issue, said Duncan and other leaders of some of the 48 unions that represent nearly 11,000 city workers, is that Bing and the Michigan-Detroit financial advisory board can impose the cuts by circumventing collective bargaining in a strong union city.

"We're not talking about just pay cuts," said Duncan. "We're talking about a complete dismantling of over 50 years of union progress. They've eliminated seniority rights, for instance."

Duncan said that by imposing new work rules on union workers, the city is making changes that have "nothing to do with saving the city any money."

(Reporting by Karen Morgan and Bernie Woodall; Editing by Leslie Adler)