Wharton's proposal involves 400 layoffs, fewer paid leave days - MSNewsNow.com - Jackson, MS

Wharton's proposal involves 400 layoffs, fewer paid leave days

Posted: Updated:
Wharton received a letter from the Tennessee State Comptroller that the city was headed towards financial ruin. Wharton received a letter from the Tennessee State Comptroller that the city was headed towards financial ruin.
That letter tossed weeks of budget votes out of the window. That letter tossed weeks of budget votes out of the window.
Wharton has released his long-term, five-year strategic plan. Wharton has released his long-term, five-year strategic plan.

(WMC-TV) - Memphis Mayor A C Wharton is proposing an overhaul of city government to fix the city's financial mess.

In the latter days of the annual budget talks, Wharton received a letter from the Tennessee State Comptroller that the city was headed towards financial ruin due to their "Scoop and Toss" actions – when you scoop up debt and toss it into the future.

That letter tossed weeks of budget votes out of the window.

Over the weekend, the mayor gave the City Council an updated plan to steer the city away from its money crisis.

The council will hold a hearing to discuss this latest plan Tuesday. It includes mass layoffs, cuts to the pension plan, health care, benefits, paid leave, and the retirement plan.

The layoffs could leave 400 Memphis city employees without a job.

Council Budget Chairman Jim Strickland cannot recall a city budget this serious in his lifetime.

"That kind of shook everything up," said Strickland regarding the letter from the comptroller.

If the city does not act, taxpayers face a multimillion dollar debt interest balloon.

The council approved several measures to get back in compliance with the comptroller, but now Mayor A C Wharton has released his long-term, five-year strategic plan that will throw weeks of budget votes out the window and overhaul employee benefits and compensation.

  • He's calling for 400 layoffs (Savings: $11 million)
  • To eliminate College Incentive and Longevity Pay (Savings: $7.9 million)
  • Fewer Paid Leave days (Savings: $3.4 million)
  • Higher medical premiums (Savings $3.45 million)
  • And to cut mandatory Medicare Part B for retirees (Savings: $16 million over five years)
  • The mayor is also proposing future pension cuts and an increase to insurance deductibles

""Personally, I'm going to work very hard to cut as much as I can, so we can maintain the same $3.11 tax rate," said Strickland.

He said the council needs more time to vet the recommendations and employees deserve a chance to react.

He will propose two full council meetings and a special called meeting before the June 30 budget deadline.

"I'm going to recommend we have a hearing on these, but delay the vote on the final budget for two weeks because these are big changes," said Strickland.

Copyright 2013 WMC-TV. All rights reserved.

Powered by WorldNow