City of Detroit's COVID-19 budget triage plan of layoffs, pay cuts come into focus

The cost of fighting COVID-19 is impacting Detroit's finances. Mayor Mike Duggan addressed a $348 million budget deficit triggering layoffs, pay cuts and no pay increases for the start of the next fiscal year with furloughs.
"We want you back, this is not that we are laying you off, so you're gone," said Duggan.

Duggan made it clear that his administration believes things will turn around and the federal government is helping.

"This CARES Bill is an example of what the federal government did really well," Duggan said. "What the president and Congress did, was very well thought out in providing that $600 per week. I think employees now as they do their calculations are realizing, for the most part financially, it is going to come out pretty close."

During a presentation to city workers Tuesday, Mayor Duggan made it clear that Detroit can cover nearly $300 million of the deficit leaving about $50 million to account for.

That's why part of the plan is to lay off 200 temporary and part-time city workers to save $6 million.

Workers like Detroit Department of Transportation ticket sellers will work reduced hours to save the city $17 million. And executives making over $125,000 including Duggan, will take a 5 percent pay cut.

MORE DETAILS: Duggan stops demo program, proposes pay cuts for $300M city deficit from COVID-19

But the mayor says there still a silver lining.

"No one has to worry about losing healthcare in the middle of a pandemic," he said.

And those who have to file for unemployment will get help.

"The city HR Department is going to file the unemployment or underemployment benefits for everybody," Duggan said. "None of our employees are going to have to file a form."

And for now, the pension fund is not impacted by the deficit.

"In next year's budget, we plan to make deposits as scheduled into the retiree protection fund," said Dave Massaron, Detroit chief financial officer.

But some services like blight removal will be put on the back burner.

"It's a problem City Council and I are going to have to address together or otherwise there won't be any demolition for at least a year."