Some Detroit workers and retirees say bankruptcy is lesser of two evils
As Yolanda Langston says, “One of the benefits of working for the city of Detroit was actually the benefits!”
But some of those benefits are now on emergency manager Kevyn Orr’s chopping block.
The city has 10,704 active employees. The money for their paychecks, benefits and pension plans will take 41% of the city’s estimated gross revenue for fiscal year 2013.
That may be more than the city can afford.
Orr says, “We’re tapped out. We need to come up with a plan to restructure our debt and legacy obligations going forward.”
In meetings last week with representatives of city employees and retirees, Orr’s staff laid out a plan that could freeze some pensions, change health care coverage, and even re-write the charter to eliminate layers of bureaucracy.Yolanda Langston says, “We know things need to change. As a coalition we try to do that, however these members are in jeopardy of not being able to have a good quality of life.”
As president of the Detroit unit of SEIU, the Service Employee International Union – and a long time Detroit employee, she’s afraid Kevyn Orr’s plan could not only lead to layoffs – but to resignations. “They could lose good workers, definitely, I could see that happening, they could also lose good residents.”
City workers have already taken cuts and re-negotiated contracts. And they could be the ones most affected by Orr’s plan. So Langston thinks, at least for her workers, bankruptcy could be the lesser of two evils. “It may be a better way to go, because at this point, we may be able to lay out everything that we were able to bring to the table in terms of health care, the cost savings with health care, the pensions.”
Ed McNeil of AFSCME Council 25 agrees that he would rather put his future in the hands of a bankruptcy judge than the emergency manager.
He told us, “I think the judge would see exactly what’s going on.”
What does McNeil think is going on?
“What they want to do,” McNeil says, “Is take everybody back to where you were years ago with respect to pay and benefits.”
He says State Treasurer Andy Dillon has another agenda and Kevyn Orr has been brought in to implement it.
McNeil says Dillon’s plan is, “He’s going to break the unions because that’s what he wants to do.”
But Orr says something must be done because the city is broke.“We’re so broke we’re borrowing from our own pension funds.”
For Don Taylor, President of the Retired Detroit Police and Firefighters Association, pensions are vitally important.
He told Detroit 2020, “The pension is my sole source of income basically. Because in the City of Detroit, police and fire didn’t participate in social security, so we don’t get social security benefits.”
Taylor’s association represents roughly 6,500 members. And 2,000 of them are over 80 years old. “And some of them, their incomes are less than $1500 a month. So if they lose $200 or $300 a month it’s devastating.”
What does he blame for the financial mess the city is in? “It’s mismanagement, corruption, you know, the elected officials.”
And so Taylor, who originally hoped we could avoid bankruptcy, has changed his mind, “The recent activities of the emergency manager where he’s talking more, putting more on the shoulders of current retirees, I don’t know if even a bankruptcy judge would go that far.”
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