Mayor Daley of Chicago has announced plans to merge several departments to trim expenses and streamline agencies. The consolidation will eliminate various government positions. The Mayor’s Office of Special Events will be combined with the Department of Cultural Affairs. The Departments of Land Use Planning and Development and Zoning will also be merged. And finally the Graphics and General Services departments will be consolidated. Previously Chicago has been streamlined, when in October of 2008, ten departments were merged into only four.
Daley consolidates Chicago city departments. (2010, September 2). Chicago Defender.
With the current four-year contract set to expire, the United States Postal Service (USPS) opened talks with the largest postal employee unions, the American Postal Workers Union, and is looking for concessions on salaries, health benefits and working conditions. The union represents approximately 211,000 mail clerks, maintenance workers, custodians, supervisors and drivers. The USPS will likewise open up talks with the 207,000 member National Rural Letter Carriers Association later this month. Postal Service employees currently enjoy more generous healthcare benefits than those available to other federal employees, with the USPS covering 79% of premiums, compared to the 72% covered by other federal agencies. Union leaders plan to fight to maintain the higher benefits, even though reducing them to the federal average would save the agency $560 million annually. Labor costs, which totaled $56 billion in 2009, account for 78% of the Postal Service’s budget.
Rein, L., & O’Keefe, E. (2010, September 2). Postal Service seeks key concessions as contract talks open with largest union. Washington Post.
There are five school districts in Alabama that have already turned to private bank loans to fund the rudimentary operations for this school year, and there are about 25 more school districts that are planning to do the same. During the past three years, Alabama schools have lost 20 percent of their education funding, taking them from $6.7 billion to $5.3 billion, in addition to dealing with midyear cuts in state funding. Even this year school superintendents were already warned for 3-5% proration. When districts are in a tight bind from these budget cuts there are no state-sponsored loan programs for which they can apply; instead, they must apply for private loans, which can be denied. One example of these was seen in Coosa County Schools, which asked for an addition line of credit worth $550,000. They were denied that credit extension and then the state took over their finances. According to the senior policy analyst at Education Sector, “Borrowing from one year to another is much more difficult because it gets into a question of sustainability. It’s a dangerous thing to do given the forecast doesn’t look a lot brighter.” Most of these loans are suppose to be paid back by the end of the school year; however, districts are still able to refinance their loans and continue digging a deeper financial hole. Tuscaloosa County School District has dug an $8 million hole with its private loans. Many blame the education cuts on declining revenues and funding the state education’s system from income and sales tax revenues.
Olster, S. (2010, August 31). Alabama schools turn to bank loans to operate. CNN Money.
After declaring a state of “financial urgency,” Miami city commissioners will vote on a plan to cut salaries and pensions for city employees, despite the fact that they are currently under union contracts. The city faces a budget hole of $105 million for next year, mostly due to a $101 million required pension contribution. Employees earning $39,000 will face a 5% cut in pay, with the percentage increasing to a maximum of 13% for someone earning over $120,000. Anyone under $39,000 would not face a salary reduction. The cuts would save approximately $31 million next year. The pension changes would cap annual pensions at $100,000, but would only affect individuals who are not currently vested. Calculations would be based on the average an employee’s five highest years’ salaries, rather than the current calculations that use either one or two years, depending on the position. Finally, benefits would only be paid out to surviving spouses for 10 years, rather than payouts for life. The pension changes are projected to save the city $41 million next year. Finally, changes to the employees’ healthcare plan would save $7 million.
Rabin, C. (2010, August 31). Miami Commission likely to cut salaries, pensions. Miami Herald.
Mayor Mitch Landrieu of New Orleans has only been in office for a few months but he has already cut 100 take-home vehicles and now is eliminating another 464. This taxpayer subsidized perk is just a small fraction of the $79 million budget gap swallowing the city’s operating budget. However, the hundreds of thousands of dollars that the move saves annually is an example of the streamlined government and elimination of waste that Landrieu has pledged to achieve. The new policy that has been instituted for take-home vehicles will provide 59 cars for city departments, the City Council and the District Attorney’s office. This is a big change from the 179 that they used to be provided. Public safety departments such as police and fire will be without 344 vehicles, but police who live and work in new Orleans will not lose them.
Carr, M. (2010, August 31). Mayor Mitch Landrieu eliminates 464 take-home cars. The Times-Picayune.