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Just two weeks after raising the sales tax to pay for pensions, Cook County Board President Toni Preckwinkle is moving to give tens of millions of dollars a year in pay hikes to county workers.
Legislation introduced yesterday by the county chief would extend raises of up to 6.5 percent throughout county government. Only those who make more than $200,000 in annual salary would be excluded.
The proposal, sent to a Cook County Board committee for review, extends to other unionized employees new contracts with some county unions that were negotiated earlier this year.
It then goes a step further: It proposes granting raises to nonunion workers, too.
The price tag totals roughly $130 million in raises over a five-year period—$50 million alone in fiscal 2016.
(The union contracts run from Dec. 1, 2012, through Nov. 30, 2017, so this deal is retroactive, too, and those figures are included in the totals here.)
But the county says the proposal also includes nearly $30 million in health care savings, reducing the net cost to taxpayers for the deal to "only" $100 million or so.
$400 MILLION HIT
Put a different way: Taxpayers over the five years will be paying about $300 million more than if pay were frozen.
The hikes are being labeled cost-of-living increases and, over the period of time, average less than 3 percent a year. (The cost of living right now is between 1 and 2 percent.) But the raise proposal comes just 15 days after Preckwinkle pushed through a plan to boost the county's sales tax by a penny on the dollar, making the combined sales tax in Chicago 10.25 percent, the highest of any major city in the country.
Preckwinkle said the sales tax hike, which will bring in an estimated $474 million a year, was needed in part for infrastructure work, but mostly would go to shore up the county's pension plan, which has been severely underfunded. She did not mention anything about pay raises.
In fact, county income can be shifted rather easily from one category to another. If this money weren't spent on employee raises, it could well go toward pensions.
'COMPLETELY SEPARATE ISSUE'
Preckwinkle spokesman Frank Shuftan said the union contracts and other pay hikes "are a completely separate issue" from pension underfunding "and have been negotiated over several years."
"Any operational funds dedicated to the pay raises are dwarfed by the dollar amounts related to pensions, whose shortfall is now measured in the billions," he said. And the raises for nonunion workers are "a matter of basic fairness" for staffers who, in some cases, have not received a raise since 2012
Another spokesman, Edward Nelson, noted that the new contracts also include employee give-backs to pay for health insurance.
The deals for union workers call for a retroactive hike of 1 percent on June 1, 2013; 1.5 percent on June 1, 2014, and 2 percent on June 1, 2015. Another 2 percent will come this December, plus 2.25 percent on Dec. 1, 2016, and 2 percent on June 1, 2017.
Mid- and low-level nonunion workers—those below Grade 23 on the county's pay system—will get no retroactive payment under the proposal before the board, but will get 4.5 percent this October and another 2 percent on Dec. 1. Says Preckwinkle's resolution, "It is contemplated that additional increases may be provided in fiscal 2017."
The incremental pay-raise hit will be $5.3 million for fiscal 2013; $13.3 million for 2014 and $21.4 million for this year. (Cook's fiscal year begins on Dec. 1.)
Total payroll then would rise another $43 million in 2016 and $37 million in 2017. Note, however, that all of those increases are cumulative. So, in 2017, for instance, taxpayers will be on the hook not only for that year's hike, but the raises that cover 2013, 2014, 2015 and 2016 that were built into the base.
Preckwinkle will not even introduce her new budget until this fall.
During the debate over the sales tax hike, some commissioners argued that it was irresponsible to raise revenues without first examining proposed spending, including for wages.
Preckwinkle has said that she will consider reducing or eliminating the sales tax hike if Springfield approves her plan to restructure the county's pension system.
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so you believe people will spend 5$ in fuel to avoid 4$ in soda tax at the grocer. SMH
