Budget & Finance

Detroit Leader Uses New State Law to Slash Salaries

By Christina A. Samuels — July 29, 2011 1 min read

Roy Roberts, the emergency manager of the Detroit school system, used a new Michigan law giving him power to modify union contracts in order to impose a 10 percent wage cut on all of the district’s employees. Roberts said the Friday move was necessary to partially close a $327 million budget deficit.

An article in the Detroit News notes that Roberts also moved school employees to a less-costly benefits plan. “This is not aimed at bad people. It’s bad economic times. There is a dual crisis at Detroit Public Schools. One is academic—this one is financial,” he told the newspaper.

This is the first time that the provisions of the “Emergency Financial Management Act” have been used in a school district, but not the first time that they’ve been used by an emergency financial manager in the state. In April, the state-appointed emergency financial manager in Benton Harbor, Mich. used his powers to strip the city commission of authority.

In Detroit, the president of the Detroit Federation of Teachers has said that Roberts’ move is “not acceptable.” He didn’t say what the union’s next steps would be, however.

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A version of this news article first appeared in the District Dossier blog.