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Cook County faces potential $500M budget hole

Friday, September 29, 2006
Crain's Chicago Business

(Crain’s) — Cook County faces a “staggering” two-year budget deficit that may exceed $500 million, interim County President Bobbie Steele said Thursday.
Announcing the findings of the transition team she appointed after succeeding John Stroger this summer, Ms. Steele said there currently is a shortfall “in excess of $400 million” in the budget for fiscal 2007, which begins in December.
In addition, she said the hole in this year’s budget has risen to just under $100 million, mostly due to lagging collections from insurers and patients who use the county’s network of hospitals and health clinics.
Ms. Steele said she’s not sure whether the $100 million is included or is in addition to the $400 million. Other financial sources were divided on that question.
Ms. Steele’s announcement drew immediate strong reaction, with Commissioner Tony Peraica, the GOP nominee for board president, saying it proves that the county needs to crack down on excess spending and patronage waste.
Mr. Peraica’s Democratic election foe, Ald. Todd Stroger (8th), John Stroger’s son, did not attend the session and was not available to comment on why county finances apparently rang up so much red ink during his father’s tenure.
Mr. Stroger later released a statement saying that the county budget "needs to be balanced without raising taxes."
Ms. Steele blamed the worsening financial picture on a variety of factors, including the troubled County Health Bureau. But she emphasized that even more money goes for the county’s criminal justice system, including the sheriff, state’s attorney, and courts system.
“It’s the Division of Public Safety that’s driving this budget,” the West Side Democrat said. “It’s not altogether the Bureau of Health.”
To deal with the shortfall, Ms. Steele said she has asked the sheriff, county clerk and other elected officials who collectively spend more than a third of the county’s annual $3.1 billion budget to hold their spending this year to 96% of their appropriation, and to cut spending 10% next year below this year’s budget.
That move likely will be resisted. Sheriff Michael Sheahan has said he is under court order to boost staffing at the county jail, and Clerk of the Circuit Court Dorothy Brown said after Ms. Steele’s speech that cuts anywhere near 10% will “impact on services.”
Within the Health Bureau, Ms. Steele called for “immediate action” to increase revenues. Plans are under way to begin billing for outpatient services, increase reimbursements from the state and private insurers, and to get other health institutions that use county staffers to pay for them, she said.
“The time has come for the surrounding hospitals, counties and states to share the financial burden” of running a charity-care system, Ms. Steele added. But she did not specify how that would happen.
Ms. Steele, who will be president only until shortly after the Nov. 7 election, also stopped short of promising to present a fiscal 2007 budget herself, saying only that she would do “all I can” to submit a proposal.
Should Ms. Steele fail to offer a budget, either Mr. Stroger or Mr. Peraica would have to present one in just their first few weeks in office.
The $400-plus million projected gap in the fiscal 2007 budget not only is larger than a $300-million gap this time last year but perhaps more based on solid numbers.
“It’s very serious,” said Laurence Msall, president of the Civic Federation, a watchdog group. “It will be difficult to eliminate the deficit if they don’t go after the store of structural employment changes that are hard to make.”
Ms. Steele released only a summary of the report. Aides said the full report will be released in 30 days.

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