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Closing the Budget gap in Detroit

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Mayor Kilpatrick proposes layoffs to help close $264 million budget gap

Monday, April 12, 2004

BY SARAH KARUSH

ASSOCIATED PRESS

Mayor Kwame Kilpatrick on Monday proposed laying off 377 Detroit city employees and cutting 263 vacant positions as part of an effort to eliminate a $264 million projected budget gap for the next fiscal year.

The city's bus system would get the most layoffs, Kilpatrick told City Council in reviewing his plan, but police, fire and emergency services would be spared from layoffs.

"Today, I present a balanced budget ... that, while making cuts and calling for sacrifice, demands new accountability and reengineering that can start us back toward solid financial ground," Kilpatrick said.

Kilpatrick's proposal also included efforts such as cutting back on overtime as well as increasing fees for some documents and services. Under the proposal, the city also would issue $80 million in bonds to help fund its pensions and another $61 million in bonds to prevent deeper cuts in services.

The 2004-05 fiscal year starts July 1.

The city says its tough financial position stems from an erosion of its tax base because of steep population decline and recent cuts in state revenue sharing. At the same time, Detroit has faced higher pension contributions and rising health care costs and has increased wages to hold on to its workers.

Cities around the country are finding it tougher to balance their budgets. According to a survey released last fall by the National League of Cities, 81 percent of cities said they were less able to meet financial needs than in the previous year. As a result, 30 percent of cities have cut jobs and 11 percent have cut back on services.

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a013-budget2-0404y-4.jpg

As Detroit struggles with a $333 million budget gap, AFSCME Local 2920 Vice President Bobbie Johnson, left, and Local 2920 President Emily Kunze protest job cuts outside the Coleman A. Young Municipal Building on Monday.

Kilpatrick: Cut 640 jobs, freeze hiring

Detroit bus system would take heaviest hit as city struggles with $333M gap in budget

By Natalie Y. Moore, Doug Guthrie and Ron French / The Detroit News

DETROIT

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