News / USA

Detroit Government Retirees Struggle to Keep Benefits

Detroit Government Retirees Struggle to Keep Benefitsi
X
April 17, 2013 9:21 PM
Detroit, the largest city in Michigan, has a $327 million dollar budget deficit, and $14 billion dollars more in long-term debt. In March, Michigan Governor Rick Snyder appointed an emergency manager to oversee Detroit’s troubled finances, making it the largest city in the U.S. under state supervision. As VOA’s Kane Farabaugh reports, some difficult decisions about the city’s expenses need to be made to avoid bankruptcy, casting doubt over the future of public employee pensions and health care plans.
Kane Farabaugh
— Detroit, the largest city in Michigan, has a $327 million dollar budget deficit, and $14 billion more in long-term debt.  In March, Michigan Governor Rick Snyder appointed an emergency manager to oversee Detroit’s troubled finances, making it the largest city in the U.S. under state supervision. 

Some difficult decisions about the city’s expenses need to be made to avoid bankruptcy, casting doubt over the future of public employee pensions and health care plans.
 
Don Taylor spent 26 years of his life as a police officer in Detroit, the city where he was born and raised. It was a dangerous job, but one he is fond of. 
 
It also provided a dependable paycheck, as well as a guaranteed pension and health care coverage in retirement.  Or so he thought. “There’s a dispute on the pensions, you know," he said. 
 
“Borrowing a billion dollars to fund your pension, yes the pension is funded, but now it’s done through more debt," said Eric Scorsone of Michigan State University. He is on the team helping the city of Detroit emerge from its fiscal crisis.
 
“It’s probably as bad as any city has ever seen in terms of a fiscal crisis. My part is to work on tax and revenue forecasting and tax issues in general for the city as they work on a plan to move forward," he said. 
 
The plan includes figuring out how to pay for retirement pensions funded with borrowed money, and how to pay for health care plans for current and retired public sector employees.
 
“The city really should be paying hundreds of millions of dollars more than it is right now, but there’s no money to do it, so the question is how do you fund that liability or do you reduce the liability by reducing benefits," said Scorsone. 
 
Taylor says the pensions and health care plans of retirees are already modest.
 
“There are a lot of misconceptions too that in the city of Detroit, that the people’s benefits are “Cadillac” plans, and they’re overpaid, where the average pension is only $30,000," he said. 
 
“I cannot believe that they could do any more cutting," said retired Detroit police officer Greg Trozak, who has two sons on the police force.  While he is concerned about cuts to his own benefits, he is more worried about future benefits.
 
“I’m sure the active people are going to be hurting a lot more than a lot of us retirees are," he said. 
 
“The elected officials in the city of Detroit should have seen this reduction in revenue coming, and should have seen that the population was declining years ago and should have adjusted for that, but they failed to do so. Now it’s resting on the backs of the employees and retirees," said Taylor. 
 
The clock is ticking to turn Detroit’s finances around.  Emergency Manager Kevyn Orr has less than eighteen months to make difficult decisions that would bring about the Motor City’s eventual solvency.

You May Like

Is Air Travel Safe?

Aviation expert says despite tragic losses of Malaysian Airlines flights 370 and 17, industry experienced lowest fatality rate in recorded history last year More

Multimedia 100 Days Later, Nigerian Girls Still Held

Activists holding rallies in Nigeria and several other countries to mark 100th day of captivity for more than 200 schoolgirls being held by Boko Haram More

Chocolate Too Bitter? Swap Sugar for Mushrooms

US food technology company develops fermentation process using mushrooms to reduce bitterness in cocoa beans, believes it will cut sugar content in candy More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Carriers Suspend Travel to Israeli
X
Carolyn Presutti
July 23, 2014 1:21 AM
The United States is prohibiting American carriers from flying to Israel's airport in Tel Aviv for 24 hours, because of rising violence between Israel and Hamas militants. The action was announced on Tuesday, after a rocket fired by Hamas militants in the Gaza Strip landed near the airport. As VOA's Carolyn Presutti tells us, international officials soon may have to determine which combat zones are too dangerous for commercial flights.
Video

Video US Carriers Suspend Travel to Israel

The United States is prohibiting American carriers from flying to Israel's airport in Tel Aviv for 24 hours, because of rising violence between Israel and Hamas militants. The action was announced on Tuesday, after a rocket fired by Hamas militants in the Gaza Strip landed near the airport. As VOA's Carolyn Presutti tells us, international officials soon may have to determine which combat zones are too dangerous for commercial flights.
Video

Video NASA Focuses on Earth-Like Planets

For decades, looking for life elsewhere in the universe meant listening for signals that could be from distant civilizations. But recent breakthroughs in space technology refocused some of that effort toward finding planets that may harbor life, even in its primitive form. VOA’s George Putic reports on a recent panel discussion at NASA’s headquarters, in Washington.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video US Awards Medal of Honor for Heroics in Bloodiest of Afghan Battles

U.S. combat troops are withdrawing from Afghanistan, on pace to leave the country by the end of this year. But on Monday, U.S. President Barack Obama took time to honor a soldier whose actions while under fire in Afghanistan earned him the Medal of Honor. VOA's Jeff Seldin has more from the Pentagon.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.

AppleAndroid