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

How to Safeguard Your Mobile Privacy

As the digital world becomes more mobile, so too do concerns about eroding privacy and increased hacking More

'Desert Dancer' Chronicles Iranian Underground Dance Troupe

Film by Richard Raymond is based on true story of Afshin Ghaffarian and his friends More

Obesity Poses Complex Problem

Professor warns of obesity’s worldwide health impact More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam Wari
X
Katherine Gypson
May 25, 2015 1:32 AM
For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam War

For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Female American Soldiers: Healing Through Filmmaking

According to the United States Defense Department, there are more than 200-thousand women serving in the U.S. Armed Forces.  Like their male counterparts, females have experiences that can be very traumatic.  VOA's Bernard Shusman tells us about a program that is helping some American women in the military heal through filmmaking.
Video

Video Iowa Family's Sacrifice Shaped US Military Service for Generations

Few places in America have experienced war like Waterloo. This small town in the Midwest state of Iowa became famous during World War II not for what it accomplished, but what it lost. As VOA’s Kane Farabaugh reports, the legacy of one family’s sacrifice is still a reminder today of the real cost of war for all families on the homefront.
Video

Video On Film: How Dance Defies Iran's Political Oppression

'Desert Dancer' by filmmaker Richard Raymond is based on the true story of a group of young Iranians, who form an underground dance troupe in the Islamic Republic of Iran. This is the latest in a genre of films that focus on dance as a form of freedom of expression against political oppression and social injustice. VOA’s Penelope Poulou has more.
Video

Video Turkey's Ruling Party Trying to Lure Voters in Opposition Stronghold

Turkey’s AK (Justice and Development) Party is seeking a fourth successive general election victory, with the goal of securing two-thirds of the seats in Parliament to rewrite the constitution and change the country's parliamentary system into a presidential one. To achieve that, the party will need to win seats in opposition strongholds like the western city of Izmir. Dorian Jones reports.
Video

Video Millions Flock to Ethiopia Polls

Millions of Ethiopians cast their votes Sunday in the first national election since the 2012 death of longtime leader Meles Zenawi. Mr. Meles' party, the Ethiopian People's Revolutionary Democratic Front, is almost certain of victory again. VOA's Anita Powell reports from Addis Ababa.
Video

Video Scientists Testing Space Propulsion by Light

Can the sun - the heart of our solar system - power a spacecraft to the edge of our solar system? The answer may come from a just-launched small satellite designed to test the efficiency of solar sail propulsion. Once deployed, its large sail will catch the so-called solar wind and slowly reach what scientists hope to be substantial speed. VOA’s George Putic reports.
Video

Video FIFA Trains Somali Referees

As stability returns to the once lawless nation of Somalia, the world football governing body, FIFA, is helping to rebuild the country’s sport sector by training referees as well as its young footballers. Abdulaziz Billow has more from Mogadishu.
Video

Video With US Child Obesity Rates on the Rise, Program Promotes Health Eating

In its fifth year, FoodCorps puts more than 180 young Americans into 500 schools across the United States, where they focus on teaching students about nutrition, engaging them with hands-on activities, and improving their access to healthy foods whether in the cafeteria or the greater community. Aru Pande has more.
Video

Video Virginia Neighborhood Draws People to Nostalgic Main Street

In the U.S., people used to grow up in small towns with a main street lined by family-owned shops and restaurants. Today, however, many main streets are worn down and empty because shoppers have been lured away by shopping malls. But in the Del Ray neighborhood of Alexandria, Virginia, main street is thriving. VOA’s Deborah Block reports it has a nostalgic feel with its small restaurants and unique stores.

VOA Blogs