ABOUT CITY FI A C S Why can't the City pay it bill ? This is th problem: The City is not collecting enough mo y to pay for all its expenses. Th current deficit is basically a venue deficit - in ome th City relied on to th pay its bills, we simply did not get. The recession has affected alm t all of our revenu sources. For instance, income tax, the City's biggest general fund revenu source, will produce $17.5 million less than was budgeted in FY91-92. The City has also lost funding from th state. For example the state, facing its own deficit, has reduced its revenue sharing payment by $26 million. Another example is the utility tax. The City lost between $14 million and $16 million because of on-going litigation and the re­ fusal of some businesses to pay this tax. , IGHLIG SO 92-93 CITY BUDGET PLA I • Eliminate 1,255 jobs - 400 through layoffs and 855 through attrition. • Freeze pay of all employees, including Mjor and City Council. All employees will get a pay cut OR take unpai furlough. i 1 • Cut non-peak hour bus service. I • Maintain level of 3,850 sworn police officers; call back laid-off officers. I • Revamp benefits and reduce cost of city employee health care. i • Eliminate four City agencies; close City print shop. I • Increase funds to take down abandoned buildings to 15.7 million. I sis of the City's budget and developed a We cannot control the national recession or comprehensive financial plan for Detroit. the decline in state and federal funding, but , Many of its recommendations are included Detroit can control its spending. _ in this budget. Many oth rs are still under review. How much is the City's deficit? The City will end this fiscal year (FY July I, 1991-June 30, 1992) with just under a $100 million deficit. Why has the deficit been reported as hign as $300 million? _ Early this year, the City projected a worst case budget scenario for th 21st Century Committee using the two-year period of July 1, 1991 through June 30, 1993. The sce­ nario assumed what would happen if the City did nothing differently. In other words: • the spending levels for FY 92-93 would be the same as FY 91-92, . • expenses such as health care would con­ tinue to escalate, • local income sources such as income tax would continue to drop, • state and federal government funding would continue to shrink, • and the already anticipated FY91-92 $100 million deficit would be paid off. If nothing changed, the worst case scenario projected that the City could face a revenue shortfall by June 1993 of S26S million dol­ lars. What has been done to change this fiscal picture? The Mayor took steps to reduce this year's deficit. For example, 1,