The Detroit Free Press notes that much of the proposed savings depends on the willingness of unions to reopen their contracts and approve reductions in health insurance and pension benefits. Bing wants to switch to 403(b) retirement plans, funded by each employee.
The news report said Bing must convince the city’s 48 labor unions to cut health care costs voluntarily and switch to a 403(b). Although both inevitably would cost employees more money, Bing pointed out that a state-appointed financial manager would have the authority to gut union contracts unilaterally.
“The unions aren’t motivated to do anything yet,” said City Council President Pro Tem Gary Brown, according to the Free Press. “It’s going to take a considerable amount of work to change that.”
If concessions aren’t made by September 1, there’s little the city could do to avoid an emergency manager, Bing warned in a 453-page report that details his five-year plan to eliminate the city’s deficit and turn it into an $89-million surplus.Bing’s plan also includes increasing employee contributions toward health care benefits by 10%.