10% pay cut needed to avoid receivership in 70 days
Stephen Pate, NJN Network, Charlottetown, Prince Edward Island, Canada, August 12, 2009 with story from
Dave Bing the Mayor of Detroit is warning city unions that unless they take a 10% hair cut Detroit will run out of money in 70 days. The unions are pushing back telling the mayor to borrow on future revenues.
The same story is being played out across the United States as municipal and state governments run out of cash. The recession has hit sales and income tax revenues hard. Ever harder hit have been property tax revenues which have plummeted from falling property valuations and the millions of abandoned homes with no owners to pay tax.