PoliticsEarly&Often recently published an article highlighting the back pay issue for Chicago firefighters following the ratification of their new contract. According to the article, retroactive paychecks amounting to around $45 million, a significant financial obligation for Chicago taxpayers, were dispatched to 4,645 firefighters and paramedics a full 12 days ahead of the deadline mandated by their newly-approved contract.
This commitment to delivering checks promptly aligns with the long-standing adage, "The check is in the mail," proving true this time after more than two years since the previous contract had lapsed. The retroactive payments, which include salary, overtime, special pay, and pension contributions, date back to June 30, 2012, when the old contract ended. These checks are estimated to total between $40 million and $45 million.
Senior officials within the mayor's office confirmed that no long-term borrowing was necessary to fund these payments. Instead, Mayor Rahm Emanuel had already allocated resources in his 2013 budget to cover the expected retroactive expenses. As quoted by one aide, "It'll be a combination of current cash flow and, if any borrowing occurs, it will be short-term debt that gets repaid over the duration of the contract, which runs through 2017."
The mayor's administration emphasized the importance of balancing the obligation to honor past commitments while maintaining essential public services. They acknowledged that some adjustments might be needed depending on the final figures, but stressed that the priority remains ensuring timely payments without compromising critical municipal functions.
Under the new five-year agreement, Chicago firefighters, paramedics, and EMTs will receive an 11% cumulative pay increase over the contract period. However, this comes with changes to healthcare benefits for retiring employees aged 55 to 65. Starting January 1st, these retirees will begin contributing 2% of their retirement benefits towards their healthcare costs until they qualify for Medicare.
One notable concession extracted by the mayor involved modifying pre-Medicare healthcare contributions for retirees, marking one of few concessions achieved during negotiations. Despite aiming for broader reforms targeting traditional union privileges like holiday pay, clothing allowances, and premium rates for cross-trained personnel, the administration conceded on most fronts.
Ultimately, the deal struck between the city and the firefighters' union represents a cautious step forward aimed at fostering cooperation necessary to address Chicago's looming pension challenges. By 2016, state regulations require Chicago to allocate $550 million toward stabilizing its police and fire pension systems, currently facing severe funding gaps. This agreement sets a foundation for future discussions focused on sustainable fiscal policies while respecting labor relations.
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