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County budget shortfall could reach $280 million

Wednesday, June 27, 2012
Chicago Sun-Times
by Lisa Donovan

Cook County Board President Toni Preckwinkle will unveil a 2013 budget forecast Wednesday that includes a projected shortfall that sources say ranges from $208 million to $280 million — created in part by eliminating another quarter penny on the sales tax next Jan. 1.


While she shepherded through a $2.9 billion budget this year, Preckwinkle is shooting to cut spending next year, sources confirm.

That could be a necessity, considering her budget team is going to have to make up for the dollars lost when the county portion of the sales tax drops still further next year.

Last year, the county estimated about $95 million in revenues would be lost in the 2013 quarter-cent rollback, but Preckwinkle and her staff predicted the giveback would boost the local economy — including a return of shoppers scared off by the tax increase.

Preckwinkle rode into office in 2010 on a pledge to get rid of what remained of the county’s unpopular 2008 penny-on-the-dollar sales tax increase, which pushed Chicago’s overall sales tax to 10.25 percent, the highest of any large city. The combined city, county and state sales tax in the city will drop to 9.25 percent after Jan. 1.

That “penny” was championed by then-County Board President Todd Stroger who saw it as a means to keeping the vast public health system in running order.

But as the economy tanked, taxpayers tightening their belts wanted to see elected leaders doing the same — not raising their taxes. As the 2010 election neared, county commissioners who feared a revolt rolled back the sales tax increase by half a penny. It wasn’t enough to save Stroger in his bid for re-election.

Preckwinkle vowed — and won enough votes from the County Board — to cut what remained of the sales tax increase by 2013 and then reined in spending to make that happen. Another quarter penny of the sales tax increase was rolled back on Jan. 1, with the final quarter penny to be rescinded next Jan. 1.

Some other county elected leaders have balked at her proposed cuts — gnashing their teeth over the fact that she’s not their boss but still holds the purse strings.

Beyond the projected loss in sales tax revenues, the health and hospital system has been running in the red in recent years. While some county officials say that fiscal management is improving, they’re still not in the clear. One observer said the state’s cigarette tax increase may have an impact, too, leaving only a few ashes in county coffers.

In the 2011 budget year, Preckwinkle’s budget team worked to erase a $487 million shortfall and this year they’ve worked to fill a $315 million hole.

Preckwinkle’s staff was tight-lipped on Tuesday, declining to talk until she lays out the numbers during a Wednesday morning news conference.




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