Broke City Breaking Employee Contracts

"State of fiscal urgency" giving Miami officials some financial outs

The city of Miami is so broke it's forcing employees to take pay cuts, even though they're under contract.

Mayor Tomas Regalado said he's never seen a financial mess like this before, and his options are grim.

“It's either that or we layoff 1,000 employees or we raise taxes to the max, and we're not raising taxes to the max,” the mayor said.

The city is operating under a state of "fiscal urgency," declared earlier this summer. The budget deficit for next fiscal year is about $110 million. The proposed cuts in salary, pension contributions and health insurance costs amounts to about $86 million in savings for the city.

That fiscal urgency declaration allows city commissioners to impose salary cuts on employees, despite their contracts.

Charlie Cox, who represents about 1,100 general service workers, said employees with valuable knowledge will retire or find work elsewhere.

“We're going to have a ton of people leave the city and the institutional knowledge will be gone,” he said.

Miami's police officers, firefighters and other union workers are all expected to choke down cuts. One police union official said the Fraternal Order of Police will sue the city if the cuts are imposed

And what really stirs some is that this is happening while the city contributes about $125 million in tourism tax dollars to the construction of the new Marlins baseball stadium.

Yes, operating expenses and tourism tax dollars are different pots of money, but it's the principle and the wisdom of the spending that's being questioned during the city's most difficult financial time ever.

The city is expected to meet on the issue Tuesday at 1 p.m.

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