Wayne County making big changes to health care, pension benefits to curb debt

DETROIT – Wayne County Executive Warren Evans says he has “strong medicine” to help fix the county’s failing finances.

“If we go on business as usual, the money’s going to run out in 2016,” Evans said Monday during a press conference. “We have a short time window to make up our minds about what we’re going to do.”

The county faces a $157 million accumulated deficit and $50 millions structural, or recurring, debt.

Noting that 70 percent of the county’s long-term obligations are health care and pensions, Evans said the county will eliminate health care benefits for future retirees and move current employees and some retirees to high deductible plans.

Evans said future pension benefits will also be reduced and the minimum retirement age is being raised to 62.

Additionally, he said jobs “at the top and bottom” will “evaporate.”

A 5 percent wage reduction will also go into effect, excluding police and prosecutors.

“The county is in a dire financial situation,” he said. “This is our most equitable and efficient way to get rid of the deficit.”

Evans said years of financial and managerial mismanagement are to blame for the county’s money problems.

“The county kind of just idly sat by and made some maybe Band-Aid responses that’s allowed this debt to grow,” he said.

Evans stressed that the county’s recovery plan will be a shared sacrifice.

“This is a plan that will work if we come together as Wayne County workers,” he said. “I am asking a lot of the stakeholders, but I’ve done my level best to get a shared sacrifice.”

Evans said the state hasn’t been involved in the recovery plan process — which, if successful, will keep the county from bankruptcy — but he said he knows if the plan doesn’t work that the state is waiting in wings.

“They are happy for us to fix our own problems. But make no mistake about it, if we do not fix our problems, someone will come in and fix it for us,” Evans said.

http://www.clickondetroit.com/news/wayne-county-making-big-changes-to-health-care-pension-benefits-to-curb-debt/32590366