Detroit Mayor Calls for Lower Salaries for City Employees
April 21, 2006
Things are getting tougher in cash-strapped Detroit, where Mayor Kwame Kilpatrick is asking municipal employees to take a ten percent pay cut - and contribute more to their own health care costs - to help alleviate the city’s budget deficit, which is estimated at nearly $300 million.
Mayor Kilpatrick recently presented his 2006-2007 budget proposal to city council, which now has the opportunity to counter with its own budget plan.
Taxpayer dollars in Detroit are increasingly paying to support municipal retirees, diverting monies that would ordinarily pay for city services. This scenario mirrors one of the major reasons for General Motors’ financial downspin - the company was paying more to its retirees than to its current employees.
Detroit is bound to have a hard time supporting its retiree pension plans with its shrinking population, and this predicament could lead to even worse fiscal problems for the city.
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