Bing administration says 2,500 proposed layoffs will help save Detroit $250M

**Novine** · April-23-12, 08:56 AM

Here comes the ax. It's not going to be pretty.

"Detroit Mayor Dave Bing’s staff this morning laid out a city budget this morning that cuts more than 2,500 jobs in an effort to shave $250 million from its annual expenses as the city tries to right its finances after agreeing to state oversight."

**Scottathew** · April-23-12, 09:18 AM

They need to cut back. People will moan and groan, but it's either this or increase taxes.

250,000,000 \ 2,500 = 100,000 per job. Keep in mind that this includes benefits. It's not like each person is pulling home 100k.

I feel bad for these folks, but this simply must be done.

**DTFellow** · April-23-12, 09:22 AM

Totally random question/thought: Is it possible for the administration to angle these layoffs to hit non-residential city workers over residential city workers as a way of maintaining tax revenue? If most of these workers are city residents, it almost seems counter-intuitive. . .

**iheartthed** · April-23-12, 09:26 AM

Originally Posted by DTFellow

Totally random question/thought: Is it possible for the administration to angle these layoffs to hit non-residential city workers over residential city workers as a way of maintaining tax revenue? If most of these workers are city residents, it almost seems counter-intuitive. . .

Not without some very nasty lawsuits.

**DTFellow** · April-23-12, 09:32 AM

iheartthed - Are you confident of that? I am not a labor attorney, and I'm assuming most workers are unionized [[e.g. have certain contract-based protections), but the LAW used to be that the city employed workers from within their borders, which is blatantly discriminatory based on location, and that was perfectly legal. While the law requiring workers to live in the city has gone away, I am not aware of any law protecting residency as a "protected class" or anything of the like. I'm not saying that this is something they should do, but if I were in charge I might consider this when looking at my options...

**socks_mahoney** · April-23-12, 09:33 AM

I want to see the numbers for how much the city could save if we stopped some or ALL of the debt service to the big banks who have bankrupted the city through the illegal foreclosures in the first place. Probably just as much if not more!!!

Many cities, including in Pennsylvania and Alabama have simple refused to pay all of their debt service rather than paying off workers. Greece also has done this thanks to pressure from the People Power.

We already bailed the banks out once [[or was it twice, or three times?). Like my friend Pete Townsend says "WONT GET FOOLED AGAIN! OH NO NO NO!"

layoffs will only hurt the city. make our downward spiral accelerate.

**iheartthed** · April-23-12, 09:34 AM

Originally Posted by DTFellow

iheartthed - Are you confident of that? I am not a labor attorney, and I'm assuming most workers are unionized [[e.g. have certain contract-based protections), but the LAW used to be that the city employed workers from within their borders, which is blatantly discriminatory based on location, and that was perfectly legal. While the law requiring workers to live in the city has gone away, I am not aware of any law protecting residency as a "protected class" or anything of the like. I'm not saying that this is something they should do, but if I were in charge I might consider this when looking at my options...

I'm not an attorney but I think targeting non-resident employees of the city would violate the Michigan law banning residency requirements.

**313hero** · April-23-12, 09:50 AM

Originally Posted by iheartthed

I'm not an attorney but I think targeting non-resident employees of the city would violate the Michigan law banning residency requirements.

What if those layed off "just so happen" to be non residents. Hmmmm

**iheartthed** · April-23-12, 09:52 AM

Originally Posted by 313hero

What if those layed off "just so happen" to be non residents. Hmmmm

It will still be challenged with expensive lawsuits that the city cannot afford.

**DTFellow** · April-23-12, 09:55 AM

The city has its own legal dept. [[as of this moment) and gets sued EVERY DAY [[or close to) for dumber things than this.

**DTFellow** · April-23-12, 09:56 AM

Mich. Comp. Laws § 15.602 is the law for residency requirements, and while it does say that you can't require someone as a condition of their employment to live within 20 miles of the city limits, it does NOT say anything about mass layoffs and selectivity / discrimination based on residency...

Also, a recent case on this issue in Traverse City, Justice Young stated that there is no express cause of action for money damages granted by this statute against a city that violates the requirement by requiring a person reside w/in 15 miles of that city.

Food for thought. Nothing more. iheart, you are totally right though, I'd bet Detroit would get sued for this... but its unclear whether they would be in the wrong.

**Zacha341** · April-23-12, 10:03 AM

Of the number of employees currently working what is the percentage of 'ghost' employees?? Such as was discovered when DPS went under investigation. Recall all faculty had to submit proof of current ID and employee number, and it was discovered that checks were being cut to folks no longer working for DPS.

This kind of fraud may be going on with the city too. Check into that first I'd say if it could save a few jobs... and cut costs which at this point is the bottom line...

**poobert** · April-23-12, 10:17 AM

Originally Posted by DTFellow

Mich. Comp. Laws § 15.602 is the law for residency requirements, and while it does say that you can't require someone as a condition of their employment to live within 20 miles of the city limits, it does NOT say anything about mass layoffs and selectivity / discrimination based on residency...

Also, a recent case on this issue in Traverse City, Justice Young stated that there is no express cause of action for money damages granted by this statute against a city that violates the requirement by requiring a person reside w/in 15 miles of that city.

Food for thought. Nothing more. iheart, you are totally right though, I'd bet Detroit would get sued for this... but its unclear whether they would be in the wrong.

Hiring someone is quite different than firing them. While I think killing the residency requirement was a Republican-backed nefarious deed that really killed the best neighborhoods of Detroit, non-residency firings is just odious.

I manage a staff and I'd hate to layoff any of them. Lay them off based on residency just smacks of injustice. So if you've been a great worker for decades and live in, say, even Hamtramck and the guy in the cube next to you is a shiftless turd who lives downtown you get the shaft based on where you live? The blow to morale and productivity would be terrible for those who survive - you become friends with your colleagues regardless of where you live.

**Hypestyles** · April-23-12, 10:26 AM

I hope the final budget determinations are announced in a reasonable amount of time- the weeks/months this drags on puts current city workers in a bad position-- I suppose it wouldn't hurt to start sending out job inquiries elsewhere right now.. but for those who are getting laid off, I hope they get more than a week's notice..

**Danny** · April-23-12, 10:31 AM

So keeping 2,000 city employees out of work would save Detroit from upcoming bankruptcy. At least we have a financial adivisory board.

**JBMcB** · April-23-12, 10:39 AM

The correct action would be to lay off those with the poorest performance reviews [[assuming the city does performance reviews.)

What will probably happen is those with the least seniority will be laid off, regardless of how well they perform on the job.

**jcole** · April-23-12, 10:47 AM

Or they'll take a page out of the school system book, and try to get rid of the highest seniority people who make the most money.

Originally Posted by JBMcB

The correct action would be to lay off those with the poorest performance reviews [[assuming the city does performance reviews.)

What will probably happen is those with the least seniority will be laid off, regardless of how well they perform on the job.

**jj84** · April-23-12, 10:51 AM

Originally Posted by socks_mahoney

I want to see the numbers for how much the city could save if we stopped some or ALL of the debt service to the big banks who have bankrupted the city through the illegal foreclosures in the first place. Probably just as much if not more!!!

Many cities, including in Pennsylvania and Alabama have simple refused to pay all of their debt service rather than paying off workers. Greece also has done this thanks to pressure from the People Power.

We already bailed the banks out once [[or was it twice, or three times?). Like my friend Pete Townsend says "WONT GET FOOLED AGAIN! OH NO NO NO!"

layoffs will only hurt the city. make our downward spiral accelerate.

You do realize that if you stop paying the debt the Banks will just go to court and get an injunction that basically will force bankruptcy on the City if they don't pay. Then they will void contracts and sell assets to pay for those bonds. You then have people that have no vested interest in the City making decisions for the City.

But fear not suburban dwellers wait 10 years and many other communities will be where Detroit is today in terms of cash flow issues -- look at the number of cities that are selling bonds to meet cash flow obligations today, only to have to pay that back in the future with the occurred interest and the 100K pensions they are still handing out to retiring Police and Fire personal.

Also don't let that whole Synder proposal that local goverment employees have to pay 20% of their benefits fool you, cities and townships can opt out and still keep their benefits too.

**Hermod** · April-23-12, 11:08 AM

Originally Posted by socks_mahoney

I want to see the numbers for how much the city could save if we stopped some or ALL of the debt service to the big banks who have bankrupted the city through the illegal foreclosures in the first place. Probably just as much if not more!!!

The banks that are doing the foreclosures don't hold much of the state and local tax free bonds. These bonds are more in the insurance company reserves, pension funds, and upper income folks avoiding federal income taxes.

Many cities, including in Pennsylvania and Alabama have simple refused to pay all of their debt service rather than paying off workers. Greece also has done this thanks to pressure from the People Power.We already bailed the banks out once [[or was it twice, or three times?). Like my friend Pete Townsend says "WONT GET FOOLED AGAIN! OH NO NO NO!"

The problem is that you only get to do it one time. Then you will find that there is a long period where you cannot borrow money again.

layoffs will only hurt the city. make our downward spiral accelerate.

If the layoffs are done right, they will hit the useless "feeders" in the unproductive and redundant layers of management that the city has. Unfortunately, the managers will target the workers who actually do work for the populace.

Buy American · April-23-12, 12:36 PM

Originally Posted by DTFellow

Totally random question/thought: Is it possible for the administration to angle these layoffs to hit non-residential city workers over residential city workers as a way of maintaining tax revenue? If most of these workers are city residents, it almost seems counter-intuitive. . .

That would be pretty lowdown and would never happen.

Start cutting the fat at the top and work your way down. Half the fat cats in the administration don't do a thing to justify their pay and the pay is way beyond what Detroit can afford.

**Det_ard** · April-23-12, 01:25 PM

Save money by laying off the outlanders? Did you run through the numbers? 2500 layoffs, instead of roughly half being outlanders lets say all are. So that's 1250 additional Detroit residents kept on. They pay 1.25% more in income tax than non-residents, so if they make $50,000/year that means the city collects $625 more. Times 1250 people equals $781K.

So is it worth $781K? What would one successful lawsuit cost the city? What would defending against the suits cost, even if they all failed? What's the cost of retaining some worker who live in the city but are worthless on the job?

Not the best idea.

**DTFellow** · April-23-12, 01:34 PM

Det_ard and others,

I was initially thinking more about what the loss of [[what could be) the primary bread-winner's salary in a family does to that family and their neighborhood. It doesn't matter where you live, losing a job, a career, is awful and has wide consequences.

Also, lets not forget property taxes. Often losing employment could mean losing one's home. While the last time I heard, it was something like 18% of the city's revenues came from property tax, these are all issues that need to be weighed when looking at where to drop the axe.

Finally, I am NOT advocating for this, but was simply interested if people thought it was feasible [[and the law, as I pointed out above, appears rather murky as to whether someone could successfully extract any money from the city over such a layoff). Neighborhood stability ought to be a factor when determining where to make cuts.

**Zacha341** · April-23-12, 01:36 PM

Well if they have a shred of remaining collective bargaining rights, union employees have to be given up to 60 days [[notice) before termination - layoff. Can you imagine the moral of that...? During such a time lots of efficiency and due diligence applied to the work at hand it can be argued...

Originally Posted by Hypestyles

I hope the final budget determinations are announced in a reasonable amount of time- the weeks/months this drags on puts current city workers in a bad position-- I suppose it wouldn't hurt to start sending out job inquiries elsewhere right now.. but for those who are getting laid off, I hope they get more than a week's notice..

**Hermod** · April-23-12, 02:33 PM

Originally Posted by DTFellow

Also, lets not forget property taxes. Often losing employment could mean losing one's home. While the last time I heard, it was something like 18% of the city's revenues came from property tax, these are all issues that need to be weighed when looking at where to drop the axe.

So we keep the guy on for pay and benefits costing $100,000 per annum so that we get his $2,500 in real estate taxes?

**Wesley Mouch** · April-23-12, 02:45 PM

Originally Posted by Hermod

So we keep the guy on for pay and benefits costing $100,000 per annum so that we get his $2,500 in real estate taxes?

There's zero logic in keeping anyone on payroll who isn't absolutely necessary to deliver safety or health.

Today's problems come from the spendthrift ways of the past for Detroit -- and as pointed out elsewhere will be coming to most suburbs in the next decade.

It is sad for someone to have lost their job. I know that firsthand. But many of these positions should have been cut years ago. It would have been kinder and better to have done organized layoffs in the past -- but we didn't. We clinged to our old way -- spending money all along the way.

"Neighborhood stability ought to be a factor when determining where to make cuts." Great sentiment -- but government at Detroit's scale isn't sustainable. We need sustainable government.