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Despite big sales tax, shortfall seen for Cook County

Tuesday, April 01, 2008
Chicago Tribune
by Hal Dardick

Despite more than doubling its sales tax, Cook County will need even more money in a few years, county officials said Monday.

County costs are expected to rise 5 percent a year and the sales tax increase, over time, will not close the resulting gap, said Donna Dunnings, the county's chief financial officer. She called the situation a "structural deficit" in which revenue can't keep up with costs.

"In fact, that structural deficit is living and breathing, and the sales tax is by no means the answer to that," Dunnings said at a luncheon meeting of the
City Club of Chicago. "So, we have to look at other revenues, as well as cost containment."

The budget shortfall closed by this year's tax increase is expected to return in three to four years, a county spokesman said later Monday.

Dunnings—appointed by her cousin, County Board President Todd Stroger—also took aim at critics who faulted her recent 12 percent pay raise that brought her yearly salary to nearly $160,000. She compared those critics with the nation's top Republican and his onetime chief political strategist.

"To use the fact that I am the [County Board] president's cousin as a distraction from the true problems the county is facing is the type of tactic
George Bush and Karl Rove would admire," she said.

"Confuse the facts. Scare the public. Tap into their angers and their fears—all in an effort to distract them from the real problems we face and to avoid going out on a limb to propose a real solution," Dunnings said.

But Commissioner Forrest Claypool (D-Chicago), Stroger's political adversary who frequently decries patronage in county government, said Dunnings missed the point.

"Todd Stroger and Donna Dunnings just don't get it," Claypool said. "They just raised taxes by almost half a billion dollars and gave out the largest raise in Cook County government to a member of Stroger's family who already is making a huge six-figure salary."

He also said the structural deficit only exists "if you follow the Stroger administration policy and don't cut costs, don't streamline government, don't reduce the bureaucracy."

Laurence Msall, president of The Civic Federation, a government watchdog group, took issue with the very notion of a structural deficit.

"A structural deficit is merely the creation of the budgetmakers, who identify more expenditures than they have revenues to pay for," said Msall. His group opposed the sales tax increase and has outlined dozens of county cost-cutting proposals.

At the end of February, the County Board narrowly approved a nearly $3 billion budget that increased the county sales tax to 1.75 percent from .75 percent effective July 1.

The sales tax is expected to ultimately generate new annual revenue of $426 million, far more than the $234 million deficit the Stroger administration projected for this year.

But Dunnings said county costs are expected to rise by $150 million a year. She also said the county anticipates losing $500 million in Medicaid funding over the next five years.

"But I am not going to stand here today and claim that we cannot make county government more efficient," she added. "We can, we have and we will continue to do so."



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