Fitz said that she pays more than $100 a month for a half-dozen medications and that much of what remains from her pension payments goes toward her housing and other necessities.
“If they cut it, I’m not going to be able to pay my rent,” she said. “I’m not going to have money. I’m going to be homeless. I’m going to be living out of my car, I guess.”
On Sunday, Orr and Snyder said that they empathize with the fears of retirees but added that the city had ignored its problems for too long and that now there is no choice but to limit pension payments.
“You get honest about it to start with,” Snyder said on NBC’s “Meet the Press.” “. . . In many cases for the last 60 years, people have ignored the realities of the situation. We’re being real now.”
Detroit Mayor Dave Bing said on ABC’s “This Week With George Stephanopoulos” that one option not on the table is a federal bailout. “I think it’s very difficult right now to ask directly for support,” he said.
Technically, the dispute between the retirees and government leaders is about math — how to calculate how much of the pension system is not properly funded. But that is an unsettled area of accounting, and both sides are able to marshal expertise in their favor.
More fundamentally, though, the question facing Detroit is how much of its remaining financial resources it will use to repay bondholders who will be needed to lend money to the city in the future, to invest in the city’s basic services and to hold fast to promises made to retirees.
“Ultimately, it’s going to come down to a finite ability to pay,” said Brian O’Keefe, a lawyer who represents retired city workers, police officers and firefighters. “We just simply believe that we must honor our obligation to pensioners who spent their entire lives working for the city.”
Detroit’s financial and demographic decline will make that difficult, some experts note. The dramatic population slide the city has experienced over the past decade has hit municipal government hard.
In 2004, for instance, there was an even ratio of city workers to pensioners, but now there are six retirees for every four workers, according to a recent report by Orr.
Orr also has cast significant doubt on the calculations the pension systems have used to determine whether they have enough funding to meet obligations, noting that individuals involved in the pension system have recently faced criminal charges.