The Detroit City Council approved a 10 per cent pay cut for nonunion city workers and city officials say they will seek similar cuts for union employees, according to the Detroit Free Press. The cost-cutting measures come as the city continues to struggle with financial problems that brought it close to state takeover last year.
The new wage reductions will be achieved through furloughs for workers in the city’s legislative and executive branches. The cuts begin Feb. 1.
Detroit officials say the cuts will save the city about $250,000 a month. Mayor Dave Bing’s administration will have to negotiate with municipal unions to impose the same cuts in the rest of the work force.
The wage reductions follow other recent cuts for city workers, including a one-year pension freeze. The council also reduced health care benefits from an 80-20 plan to 70-30 for nonunion employees of the mayoral and council staffs, according to the Free Press. The city expects to negotiate with unions to also spread the reduced health benefits to other workers.
Bing has proposed a package of cuts to save $25 million for the financially-strapped city. Council members trimmed some proposed cuts, leaving open the option for deeper cuts later if needed.
Detroit’s budget troubles came to a head last spring when the city council reached a consent agreement with the state just 24 hours before Gov. Rick Snyder’s expected appointment of an emergency manager to oversee the city. The agreement included establishing a financial advisory board to advise and review city finances, with four of the eight members appointed by the governor and the state treasurer.