Bing: Pension savings mean museums shouldn’t be cut
Bing: Pension savings mean museums shouldnt be cut
Some on council not sure deal will solve city budget problems
Leonard N. Fleming/ The Detroit News
Detroit Touting it as a victory to help ease the citys budget gap, Mayor Dave Bing announced Thursday that the citys two pension systems will provide more than $60 million in savings.
He said the deal will make the proposed City Council cuts to cultural institutions and public safety unnecessary. But some council members arent so sure.
During two news conferences Thursday, Bing trumpeted the deals with the General Retirement System and Police and Fire pension boards that he says eliminate his request to withhold a payment to the pension system for one year.
The mayor said budget negotiations can be tough but hoped council members wouldnt continue with cuts.
The councils proposal to cut the police budget 4.9 percent would lay off 300 of the citys 3,000 police officers, the mayor said.
That is the last thing we should be doing at this point, Bing said. Let me be clear: Our fiscal stability cannot be another political point-scoring contest.
The council is proposing cutting $65 million from Bings $3.1 billion budget, which already includes $200 million in cuts. Council members are set to consider the plan Tuesday that also slashes subsidies for museums by some 75 percent and cuts funding for buses.
The pension deal may have saved money, but Councilwoman Saunteel Jenkins said Bings budget still relies on $20 million in savings from increasing taxes on casinos that hasnt received support from Lansing lawmakers.
Council felt it was the most responsible thing to do to not count revenue we dont have yet, Jenkins said. If we get revenue in, we can always make the changes. A budget is a plan. And it is our position that we should plan more conservatively.
On Wednesday, the retirement board voted unanimously to give back nearly $14 million in pension obligations over seven years; Thursday, the police and fire board agreed to $48 million.
The deals essentially spread out the period the pension systems have to pay for losses from five to seven years. They came after Bing met with both boards about two weeks ago to ask for concessions.
The two pension systems lost nearly $2 billion in assets between 2008 and 2009, according to the mayors speech, which prompted the city to make an annual loss recovery payment of $65 million for this fiscal year.
In his budget address to the City Council last month, Bing said this fiscal year alone pension costs totaled $200 million and that pension reform is not new but our sense of urgency has never been stronger.
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