Wayne Co. announces hiring, pay freeze amid expected $152M shortfall
Detroit — Wayne County, Michigan's largest, has announced a hiring and pay freeze, as the coronavirus crisis and the two-month lockdown leave the county about $152 million short, according to early projections.
The hiring freeze was made official with executive order 2020-001, issued by Wayne County Executive Warren Evans.
“The ongoing global pandemic and 'Stay Home' orders are putting a tremendous strain on the county's ability to fund essential services at current levels,” said Evans in a statement announcing the order.
"(A)s a direct result of the COVID-19 emergency the Wayne County chief financial officer projects significant reductions in revenue causing a shortfall in the county’s general pool cash account and other fund accounts for at least the current and next fiscal years," reads a portion of the order, which was issued last Thursday.
Last week, at a meeting of the Wayne County Commission's Ways and Means Committee, assistant county executive Khalil Rahal discussed the $152 million shortfall.
"We have a budget of about $1.67 billion and we're halfway through the budget year ... and so when you calculate it, it's almost 20 percent," Rahal said.
The county's fiscal year ends in September. The 2019-20 budget listed 1,332 positions. County officials did not immediately respond to a request for information.
Vacant positions must be left unfilled. Pay is also frozen, unless the raise is subject to a previous collective bargaining agreement.
Exempt from the order: spending related to the virus crisis, grant-funded positions, mandated spending and spending that comes entirely from state or federal funds.
In 2015, a "structural deficit" of $50 million and a $20 million pension expense pushed the county to what Evans called "financial Armageddon," as he announced a hiring freeze.
Even before the outbreak, Wayne County hadn't recovered from the Great Recession. Property values, of about $308 million, were down almost $100 million from 2007.
Then-county spokesman James Martinez said before Evans' 2019 State of the County address that "the next four years will be as difficult or more difficult than the past four years."
Last week, at the Ways and Means Committee meeting, Hughey Newsome, the county's chief financial officer, sounded a similar note.
"(B)ecause of the potential for an economic downturn, the (2021) fiscal year will also have a lot of pressure," Newsome said. "Fiscal year '22 will also have a lot of pressure."
The crisis will force the county to pull from its rainy day fund, Rahal told the committee.
"If it's not raining now, then I don't know when it's raining," Rahal said. "This is a once-in-a-lifetime situation and there's no more appropriate time to do it."
The state of Michigan has temporarily laid off about 2,900 of its roughly 48,000 employees during the outbreak, and expects to save about $5 million. Attorney General Dana Nessel laid off about 100 people temporarily, which is a quarter of her staff, while Secretary of State Jocelyn Benson laid off 900 people temporarily. That's about 60% of her staff.
Michigan lawmakers will have to address a budget shortfall projected between $1 billion and $3 billion. The state, by law, must balance its budget every year.