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Detroit mayor's budget plan includes 2,500 layoffs

By Jeff Karoub

Associated Press

Published: Monday, April 23 2012 6:30 p.m. MDT

Gov. Rick Snyder talks to business and community leaders during a public discussion about the economic future of the state at the Max M. Fisher Music Center on Monday, April 23, 2012. There was also a roundtable discussions about problem solving Detroit's problem of education, public safety and cities services.

Detroit Free Press, William Archie, Associated Press

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DETROIT — Detroit Mayor Dave Bing on Monday laid out a budget proposal that would cut more than 2,500 jobs — nearly a quarter of the city's workforce — and shave $250 million in annual expenses after the financially struggling city agreed to state oversight that is aimed at fixing a deficit and long-term debt.

Chief Operating Officer Chris Brown told City Council members the layoffs would be in addition to 1,000 job cuts Bing sought earlier. He said the city's general fund revenues will decrease from $820.5 million to $739 million.

Detroit now has about 10,800 employees and an overall budget of about $2.5 billion, according to Bing's office.

Bing's executive budget proposal also calls for privatizing the city's bus system and transferring its lighting department and airport to an independent authority. The plan also calls for eliminating departments — including workforce development and health and human services — and creating an authority to run them.

Proposed job cuts are wide-ranging and include the staffs of the mayor and city council, as well as buildings and safety engineering, finance, human resources and recreation.

Detroit has an accumulated budget deficit of $265 million and has $13.2 billion in long-term structural debt. A state-appointed review team determined last month that Detroit was under severe financial stress and recommended the city operate under an agreement with Gov. Rick Snyder's office.

In doing so, the city avoided a state-appointed emergency manager, who, under state law, could have dismissed Bing and the council members. But the deal requires the city to meet specific financial reporting deadlines and make realistic revenue projects.

Monday's proposals, which extend across all departments, expand on the legal budget proposal Bing submitted to council members on April 12. The initial $2.5 billion proposal came with a 10 percent pay cut for police and firefighters, a reduction in some city services, consolidations of other departments and concessions from city vendors.

The executive budget proposal includes job cuts to the staffs of the mayor and city council, as well as the following departments: police and fire, buildings and safety, finance, human resources, recreation, district court, water and sewer, transportation and others.

Even with lower revenue projections, the Bing administration has said it expects close to a $100 million surplus in the fiscal year that begins July 1.

Snyder, who spoke Monday morning at a business forum, said state and city officials are "asking for sacrifices," but at the same time "creating a much better environment where job creation can happen."

"We need a sense of urgency," he said. "I don't believe there's still enough urgency there. I'm not seeing it across the board yet."

Richard Mack, a lawyer who represents a coalition of Detroit's civilian labor unions that hammered out an agreement with the city before the consent agreement, said he's disappointed to see more proposals focused on privatization.

He has been involved in studies that show workers at private companies are paid as much as three times per hour than city employees make for the same work.

"It doesn't make any sense why private contracts are seen as the solution — long-term or short-term," Mack said. "What the city will say is we want to get rid of some of the long-term bids. You don't do that by putting yourself in a position of dependency on companies that don't have the city's best interests at heart."

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