BY JANET POST
MIAMI - Members of four unions here voted to freeze
their wages for two years and cut benefits after Miami city
officials announced a $68 million deficit in the city's
1997 budget. Workers in the Laborer's International Union
Local 800, the American Federation of State, County and
Municipal Employees [AFSCME] Local 1907, and International
Association of Firefighters Local 587 will not receive
their 4 percent cost-of-living raise scheduled for Jan. 1,
1997 until Sept. 1, 1998.
In addition, firefighters will also lose the money they now receive from special emergency medical services, and supplemental pay for worker's compensation claims will be reduced.
Rated by the Miami Herald as the "fourth poorest" of major U.S. cities, Miami has a population of 375,000 - 15 percent of the metropolitan area. Miami administrators threatened employees "that the city may face abolition, bankruptcy or state takeover if they don't approve an emergency plan to freeze salaries and cut benefits."
The current budget situation, called the "worst financial debacle in city history," was exposed after the former city manager, César Odio, resigned September 12, the day he was to present the 1997 budget.
Odio, a right-wing Cuban-American and longtime darling of the establishment here, has been indicted by the federal government for conspiracy, embezzling, and witness tampering in relation to a city contract with Cigna Health care insurance. Miami's former financial director, Manohar Surana, also implicated in the scandal, agreed to be wired by the FBI to gather evidence in what is called Operation Greenpalm. Miller Dawkins, a city commissioner who pled guilty to corruption charges in another kickback scheme has resigned and is out on bail along with Odio.
Some Cuban-Americans, including right-wing radio commentators of Radio Mambí, have protested that Justice Department charges against Odio were an attack on the Cuban community in Miami. This perspective has not won support, however, among broader layers of Cuban Americans here.
After Odio resigned, an interim city manager, Merrett Stierheim, announced that the city had used pension funds to pay for other expenses for at least the last two years. To cover its pension deficit, the city government had used profits from the sale of a $72 million bond to cover up the losses after the books were closed for the fiscal year. Other monies as well, for years, had been shifted from fund to fund to hide other deficits in what some officials and the media now call a "shell game" that mainly involved taking money from city services.
The pension fund depletion had been exacerbated by the layoffs and forced retirements in recent years carried out by the city administration itself, leading to more workers needing pensions. Just in 1995, Miami administrators laid off 428 city workers. In 1977, five firefighters filed a lawsuit against the city for using their pension money for operating expenses.
Concessions tied to cuts in services
City union officials have attempted to tie the
concessions accepted by the unions to cuts in social
services. They support an increased garbage pick-up fee and
the institution of a fire service fee, saying that everyone
must "share" in the resolution of the financial crisis.
The city earlier passed an ordinance charging residents for sweeping city streets and sidewalks. "That's at least $2 million," declared Commissioner Humberto Hernández.
On December 8, the administration laid out initial proposals on service cuts such as the closing of parks and pools, proposed new social service fees including one for use of the fire department and said that each city department must cut their budget by 15 percent.
"There will have to be employee cuts," said Miami Fire Chief Carlos Giménez.
If Miami declares bankruptcy it would allow all of the union contracts to be nullified. According to the Miami Herald, the government claims that the current contracts already have a provision that allows them to be reopened if the city faces a "true fiscal emergency," and may "possibly lay off dozens - if not hundreds - of workers."
"Greedy, incompetent politicians, that's who caused this, said Permon Anderson, a firefighter with 15 years seniority. "I guess maybe I'll vote for it [the concessions] but why is it us, the city workers, who are having to pay for this when it was supposed managers who caused it."
Carlos Pérez, with ten years as a firefighter also voted for the concessions but said, "We hear about a crisis every few years and then they go back on a spending spree and we're back in it and they ask us to sacrifice. Soon we're going to be paying them to work."
Attempting to sell the concessions to AFSCME Local 1907 members, the union's "economic expert" Lawrence Jessup told a meeting of hundreds of members, "This is not a case of the administration `crying wolf; to gain a political advantage in an attempt to extort economic concessions from your unions as has been attempted in the past."
A threat by the city to privatize garbage collection is also opposed by members of the Laborers' union who already lost many of their members when the four-men trucks went to two-men trucks. There are now 200 employees in the sanitation department which had workforce of 600 some 20 years ago. Eighty-five percent of the sanitation workers are Black.
Bankruptcy discussions
In a recent meeting with Florida governor Lawton Chiles,
Miami mayor Joseph Corollo said that the deficit is
actually larger than $68 million. Chiles, for the first
time in Florida, named a state oversight board to monitor
the financial decisions of the Miami city government.
Discussions around bankruptcy have been reported in the
media, with comparisons to past and current U.S. budget
deficit crises in New York City, Cleveland, Washington,
D.C. and Orange County, California.
The budget deficit of $68 million is nearly 25 percent of the city's $275 million operating budget and "currently it is estimated that Miami has enough cash to meet its obligations only until March," reported the December 4 New York Times.
Meanwhile, a group called Citizens for Lower Taxes say they will turn in 20,000 signatures this week to put a referendum on the ballot calling for the abolishment of Miami as a municipality, well over the 13,000 signatures required. Even Carollo had to point out that Miami is already the "highest taxed of all the major cities in South Florida."
After several downgrades since September, bond ratings services Standard & Poors and Moody's Investors Service currently rate the city's bonds as "junk bonds" - bonds viewed as below investment grade. The ratings measure the risk for investors of whether the bonds can be paid back and effect a city's ability to raise money. Seeking to increase the pressure on working people, Moody's has singled out winning concessions from the labor unions and raising garbage collection fees as "two critical components" of any financial "recovery plan."
Miami city bonds were also minimally downgraded in 1992. At that time, Moody's concluded, "Nearly one-third of the city's population is now below the poverty level, and most recent per-capita income is equivalent to only two-thirds that of the state."
In late October, Florida state auditors presented a list to the governor's office of 39 local governments in the state that were reporting "financial strain."
Janet Post is a member of the International Association of Machinists Local 368 at United Airlines in Miami.