Detroit could raise income tax to save city

City faces financial crisis, looks for solution in tax increase

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DETROIT - A top advisor for Mayor Dave Bing told Local 4 that the city of Detroit's officials are looking at what kind of revenue could be generated by raising the city's income tax.

The current income tax is 2.5 percent for residents and 1.25 percent for non residents who work in the city.

Detroit will not be receiving the $220 million that Bing said the state of Michigan owes Detroit. That means job cuts are on the horizon for the city that faces a devastating budget deficit with a cash reserve that could run out by next fiscal year.

Bing announced this week that 1,000 layoff notices will be received by city workers by February. City Council President Pro Tem Gary Brown said at least 1,500 layoffs will have to be made immediately and that Bing was not cutting enough.

The layoffs are no surprise and there could be more unless Detroit's unions reopen contract negotiations with the city and agree to concessions that the mayor and the City Council agree need to happen to mitigate layoffs.

If no concessions happen the city could be on the road to a state takeover with a state-appointed emergency manager.

Bing said he is trying to avoid such a takeover, and Michigan Gov. Rick Snyder has been reluctant to back it, too.

The tax increases would have to go before state legislators.

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