With Detroit's New Plan, Plenty Of Pain To Go Around

Detroit's emergency manager recently released his plan to get the city through bankruptcy. What do retired city workers think about possible reductions to their pension through the city's bankruptcy?

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JACKI LYDEN, HOST:

This is WEEKEND EDITION from NPR News. I'm Jacki Lyden. The city of Detroit is once again at a crossroads. The state-appointed emergency manager Kevyn Orr recently released his plan to get the city through bankruptcy, and it had plenty of pain to go around. According to the plan, unsecured bondholders would receive only 20 percent of what they're owed. City employees who've retired would absorb up to 34 percent in cuts to their pension checks. That's got Detroiters up in arms. In his State of the City address last week, the new mayor, Mike Duggan, said he hopes that, quote. "every effort will be made to honor the pensions of the men and women who gave their careers to this city." WEEKEND EDITION's Rachel Martin went to Detroit this past week and sat down with several pensioners to talk about what the cuts would mean to them.

RACHEL MARTIN, BYLINE: We gathered together a small group of pensioners at the studios of our member station in Detroit, WDET. Each person has a different story and life experience, but they are all frustrated, even fearful, about what might happen if the cuts go through. The voice you'll hear first is that of Becky Kholer(ph). She's a 45-year-old mother of three and she's been a firefighter with the city of Detroit for the past 13 years.

BECKY KHOLER: Regarding the pensions, it really makes me nervous because I still have time to catch up, you know, if they do the cuts. But I wasn't prepared for it yet. So, now I have to kind of rearrange my whole career choice and what I wanted to do and when I wanted to retire in order to make up for that.

DOUGLAS GRANT: My name is Douglas Grant. I worked with Detroit EMS for 25 years. I was starting to feel ill and I had enough time to retire. And I retired. In the same month I retired, I was diagnosed with brain cancer, had surgery. Then we get hit with what's happening in the pension. Already, we've had to sign up for health insurance that'll cover me, my wife and one of my sons in college full-time for $1,300 a month. And I start paying next month. And we don't have a clear word on what the city's going to do to make up for that at all.

MARTIN: Ella.

ELLA JOHNSON: My name's Ella. I'm 67.

MARTIN: What's your last name, Ella?

JOHNSON: Ella Johnson. I'm so angry I could spit nails. I worked 33 years for this city and I was a good employee, as most city employees are. And, you know, what am I supposed to do? I've been living on a set salary for 10 years and now you tell me it's just going to be cut and I should just suck it up? I'm praying a lot. I'm praying a lot - for them to get some sense and some sensibility and some morality. Are they taking pay cuts? Is Orr taking a pay cut? That's what I want to know.

MARTIN: Kevyn Orr, the city manager.

JOHNSON: That's right. That's right. Him.

MARTIN: There seems to be a consensus, right, that Detroit is obviously bankrupt. There's a lot of pain that has to be spread around and that everyone's going to suffer. Do you buy that? Are you willing to concede some cuts?

KHOLER: Well, it's really hard to say why we are in bankruptcy. Are we in bankruptcy because of the financial situation of the nation or are we in bankruptcy because of poor choices that our city officials made? So, it seems like Detroit's a test case. Let's see what we can get done here and then we can go to the other cities, like New York and L.A. and Atlanta and Chicago and see what we can get from them too.

JOHNSON: Amen, amen, amen.

KHOLER: That's what it seems like to me.

JOHNSON: The whole thing speaks to credibility. You know, like, it's like who do you believe now? The union says we're fully funded. The city says, oh no, they ain't. OK. I'll take some cuts but 35 percent plus my vision and my...

KHOLER: We have taken cuts. We are willing to take cuts.

JOHNSON: Right. If you're a city employee, by definition, you have taken cuts over and over and over.

KHOLER: Right. But isn't there a limit? Shouldn't there be a limit?

MARTIN: Doug, what are your primary, most immediate concerns?

GRANT: My most immediate concerns is that I can afford to stay in my house. My house is paid off but if things get worse, if I lose a lot more, I'm paying $1,300 a month for my health insurance at this point in time. I can't let that drop. That takes half my pension.

MARTIN: So, how are you making ends meet right now?

GRANT: Right now, we're down to one car. For years, I actually commuted to work by bicycle and I still ride a bike quite a bit. And it keeps my costs down. I do good on that. But it's going to pinch. It's going to hit. My wife is already babysitting. I'm really not able to work at this point. Under chemotherapy, it's almost impossible.

MARTIN: You're in a bad health situation, and in an exceptional situation. What are your concerns for your family? Because as I understand it, your prognosis is not great.

GRANT: It's not great. It's going to affect my wife, my three boys. They're going to have to take care of me as it is. It's coming. It's coming soon. And I want to see this fixed before I'm gone.

JOHNSON: Why would anybody want to come to the city of Detroit to work? You know? If something happens, they're going to cut you loose and just sell you up the river.

MARTIN: Becky, you said earlier in your first remarks that you are in the process of reassessing your career options. What does that mean? How are you thinking about your career differently now?

KHOLER: Well, for me, I just wanted to - like you said - I just wanted to do my time, you know, do a good job at what I was doing, which is firefighting, move up the ranks and then at maybe 25 years retire. Well, now I can't depend on that. So, I have to go back to school, I have to, you know, reevaluate do I want to stay in this profession or do I want to seek a different profession that's more stable? I don't know. And it's hard because I'm already 45 years old. So, that's, it's...

MARTIN: Are any of you developing contingency plans, looking for other work, other sources of income?

JOHNSON: Well, I have a part-time job. You know, like, at 67 I thought, well, this is a part-time job just to keep myself busy.

MARTIN: What's your part-time job?

JOHNSON: The hell it ain't.

(LAUGHTER)

(LAUGHTER)

JOHNSON: I work on emergency telephone lines for neighborhood services. So, my set amount of time working per month is every other Sunday. That's all I'm obligated to work. I think I'll be working a lot more hours now.

MARTIN: The municipal bondholders are supposed to get 20 percent to the bankruptcy. Is that something that you all think is fair? They're taking a big hit.

GRANT: Oh, yeah. They're taking definitely a big hit but they didn't work a lifetime here either.

JOHNSON: We're talking about individuals. My name is Ella.

GRANT: They gambled their money.

JOHNSON: My name is not Ford or Chrysler or GM. I'm talking about being able to buy food and provide rent and heat. I'm not talking about furnishing an office or making more, having a larger profit margin. I'm talking about sustaining my life.

MARTIN: Ella Johnson, Becky Kholer, and Douglas Grant - active and retired city workers of Detroit talking about the possible pension cuts included in the city's bankruptcy plan. And as you heard, they are angry about the proposed reductions. But there are also those who say the city must cut its cost, and that's got to include pensions.

SHEILA COCKERELL: There's not going to be a solution where there's not sacrifice. The thing is it has to be shared sacrifice.

MARTIN: This is Sheila Cockerell. She's lived in Detroit all of her 66 years and has served 16 of them on the city council. She now teaches at Wayne State University.

COCKERELL: What are you prepared to give up to protect the pensions 100 percent? Are we willing to reduce the number of police officers that are in the city to provide service? Cut the number of lights? Reduce EMS service? If we want to say 100 percent no change and we don't believe, as I do not, there's no manna from heaven who's going to drop down and get handed to us, there's nobody going to be able to do, you know, loaves and fishes and produce these dollars. None of that's going to happen, so we're going to have to give up something. What are we willing to give up?

MARTIN: It's an impossible kind of choice, yet that's what the city is faced with as it tries to dig its ways out of its roughly $18 billion debt. The plan is open to change, though. If a timely settlement is reached, the pension cuts could drop from 34 percent to 26 percent for general city employees. The judge overseeing the bankruptcy has called for a hearing in June to try to reach a settlement.

LYDEN: That was WEEKEND EDITION's Rachel Martin on assignment in Detroit. You can hear more of her reporting from Detroit on next Sunday's show, including a story about recycling material from some of Detroit's many abandoned homes.

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