EAST CHICAGO | City Council members wasted little time Thursday rejecting proposed 2012 salaries for city employees, instead devoting most of the afternoon's special session to a discussion of changes in their own pay.
The administration made assurances that no employee would lose income through a modernized job classification system that would have replaced previous multitiered payment levels with specified ranges for each job title, but a majority of the council remained unconvinced.
"The sticking point was that variable scale," council Finance Committee chairman Juda Parks, D-at large, said after the meeting.
"The council felt that someone doing the same job as someone else should be paid the same."
State law requires municipalities approve salaries for next year by Sept. 30, so without any action from the council, all job titles, salaries and wages for employees in 2012 will remain the same as this year in a structure originally endorsed by former Mayor George Pabey in 2009.
Most of Thursday's session involved a discussion of changes recently requested by the State Board of Accounts to how the council is paid.
For decades, East Chicago City Council members received a biweekly salary check in addition to a monthly so-called "stipend" check for expenses ostensibly related to their office. That currently totals $42,356 per year for each council member.
But state auditors say that federal guidelines require Federal Insurance Contributions Act and Medicare taxes be withheld from the stipend payments, interim City Controller Kimberly Anderson said, so her office will begin issuing a single, biweekly check for both amounts.
"You were always being taxed on your stipend. It's just in a different way now," Anderson said. "We're not going to mess with the (Internal Revenue Service)."
Karl Cender, the council's financial adviser, admitted that council members will pay a bit more in taxes because of the change, "but that's how the State Board of Accounts says we have to do it."
Anderson said that state and federal taxes would remain the same, with an approximately 6 percent increase in the FICA and Medicare assessments.
"This has been a problem since day one," said Gilda Orange, D-6th. "People will see this and think East Chicago council persons make $42,000 a year ... all people will see is the bottom line."
The 2012 council salary structure, which ultimately received preliminary approval Thursday, also would reduce the annual travel allowance for each member to $2,500 from the previously allotted $4,000.