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Stroger proposes tripling sales tax, boosting other levies.
Sharp debate over what some say is just a list of options

Wednesday, October 17, 2007
Crain's Chicago Business

(Crain’s) — Cook County Board President Todd Stroger on Wednesday raised his tax hike ante, proposing a fiscal 2008 budget that includes not only the huge sales tax increase that already has been rejected once by the County Board, but more than $100 million in additional new levies.

He also asked for a $2.4-million increase in the property tax levy to pay for the county’s forest preserve system.
Though most funds would be used to fill budget holes, Mr. Stroger conceded that his proposed spending plan would increase the county's employee head count 1,100 jobs, about a 5% increase. The new jobs are needed to cut waiting lines and restore health services at Stroger Hospital, modernize data processing and meet court orders for staffing at the county jail, he said.

Overall, Mr. Stroger asked the board to approve more than tripling the county’s existing sales tax, from 0.75% to 2.75%

— the same hike the County Board declined to pass on Oct. 1. When fully implemented, such an increase, plus a hike in the related use tax on major purchases out of the county, could yield nearly $1 billion a year.
 
Mr. Stroger also proposed doubling the downtown parking tax to pull in an additional $22.8 million and doubling the county’s gasoline tax from 6 to 12 cents a gallon. The latter would bring in an additional $24 million for the 2008 budget.
Some commissioners said they believe Mr. Stroger is effectively offering them a menu of options to choose from to close a $239-million gap in the county’s $3.2-billion budget. But Mr. Stroger told reporters he wants all of the tax hikes to be approved because all of the money eventually will be needed to pay rising costs of running county government.

"We don't want to come back and ask people for more money every year," said Mr. Stroger. Given that the county is considering tax hikes now, "it's smart that we try to nip in the bud" the need for future increases later.

The sales tax increase would not be implemented until at least the middle of next year, offering only limited support for
the 2008 budget.

The $239-million gap is $68 million less than was projected just three weeks ago. Mr. Stroger did not fully explain how he could come up with such savings in such a short period, but budget documents indicated that 735 unfilled jobs would be eliminated and overtime would be reduced.

Mr. Stroger strongly argued in addressing commissioners that the county suffers a long-term structural deficit and said he has done about all he can to cut expenses now.

“There simply are not enough cuts left to close our budget deficit without cutting vital services,” he said.

Existing contracts with employee unions and other scheduled raises will cost the county $138 million next year, he said, and contracts with vendors will require an additional $106 million. At the same time, Medicaid payments from the state and federal governments will drop a projected $68 million, he said.

Overall, spending in the general county budget Mr. Stroger proposed would rise just under 7%, or $206 million, to $3.2 billion.

The budget came under intense immediate fire, both from Stroger foes on the board and from outside watchdogs.
“This looks like an expansive county government, not a bare-bones budget,” said Laurence Msall, president of the Civic Federation, a tax policy group. “I’m disappointed.”

Mr. Msall said the $68 million in additional savings that was suddenly found in the past couple of weeks “tells me there’s a lot more efficiencies that could be there.”

Commissioner Michael Quigley said the county’s anti-reform past is catching up with it.

“We’ve never evolved. We’ve never streamlined,” he said. “Nothing in this budget changes any of those things that I can see.”

However, Commissioner John Daley, chairman of the board’s finance committee, said he believes Mr. Stroger proposed a budget that, with some work, can be approved.

“I think he offered us a menu,” Mr. Daley said. “Maybe this board will come up with some compromise.”

Mr. Stroger spoke favorably of a recommendation from his advisory panel to turn over operation of the county’s huge health care system to a non-political outside board. But he offered no timetable on when that might occur.



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