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County finances heading south

Tuesday, May 16, 2006
Special to suffredin.org
by Jonathan Lipman

Cook County revenue continues to fall and while budget officials say the county won't go broke this year, some commissioners are getting worried.

"The Cliffs Notes version is we're running out of money," said Commissioner Gregg Goslin (R-Glenview). "We're going to have to make some difficult decisions in December.

Earlier this month, budget officials said Cook County was about $16 million below its estimated revenue for the first four months of its $3 billion 2006 budget.

Things are not getting better after another month of data, Comptroller Walter Knorr said Monday during a meeting of the county finance committee.

Hospital revenue, the biggest hole in the budget, was another $3 million short in April and now is $26 million behind. Cigarette tax revenue was $4 million behind in April.

Finance committee chairman John Daley (D-Chicago) said new jail guards, increases in salaries and a decrease in federal health care money leaves a minimum $163 million hole in the budget next year.

If employee unions win any major concessions in their contracts, which are under negotiation now, that number could grow, he said.

"The contracts ... unless we fund it properly, with new revenues, that's where a problem could occur," Daley said. He said a hole that big could mean tax increases "or else some serious cuts throughout the county."

The county also has to make up an extra $20 million decrease in Medicaid money from the state.

They county got that money last year as a last-minute bailout that allowed commissioners facing re-election to approve a budget without a property tax increase. But commissioners were reminded Tuesday the cash was not an overall increase in funding, but actually an early payment that would otherwise be paid to the county in 2007.

"That's no surprise," Daley said. "That number was thrown out at last year's budget."

Knorr refused to give estimates of where the county will wind up at year's end, but said there is $464 million in the bank, and the county is in no danger of going broke.

But Knorr also signaled he was skeptical of claims from hospital officials that revenue from patient fees would improve. He said those numbers have to be "watched like a hawk."

"We're walking a fiscal tightrope," Knorr said.

Health bureau chief Daniel Winship said revenue was low in February and March because the county allowed contracts with its billing companies to lapse.

"I think we'll make (up the gap) because I think the money is there," Winship said.

But those billing contracts were renewed in April, and fee collection still was less than budgeted. Winship said he could not comment on that because he had not seen the April figures.

Jonathan Lipman may be reached at jlipman@dailysouthtown.com or (312) 782-1286.



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