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Should Toni Preckwinkle Halt the Cook County Sales Tax Roll Back?

Thursday, June 28, 2012

by David Ormsby

Cook County Board President Toni Preckwinkle on Wednesday released the preliminary Cook County budget for next year and she projects a 12 percent or $267.5 million gaping budget hole.

And that's the good news.

When Preckwinke came to office, she faced budget holes of $487 million in fiscal year 2011 and $315 million in 2012 because, in part, because she rolled back .75 percent of the penny-on-the-dollar sales tax implemented under her hapless predecessor Todd Stroger.

Nevertheless, she balanced those budgets by cutting mostly low-hanging fruits and nuts and deft fiscal management.

Next year it will be harder. Much harder.

In next year's budget, Preckwinkle aims to roll back the final .25 percent of the hated Stroger sales tax, costing the county treasury $87.8 million.

Meanwhile, the first-term board president, who recently snagged the 2012 County Leader of the Year honor from American City & County magazine, expects that the county tobacco tax haul will fall $20 million and the gas tax will come up short $3.8 million. A drop in court in filings will drain an additional $12 million from the county's wallet.

Salary increases for county employees embedded in labor contracts and a revenue shortfall in the county health system account for 69 percent of the projected Cook County budget hole. Raises for county employees will drive up spending by $33 million and poorer people without insurance seeking health care will help a deepen a $152 million hole in the county health system budget.

"This preliminary budget forecast is evidence we are making progress, ...," said Cook Preckwinkle. "There will be tough choices made in the next several months to balance the budget that will be hard for many people, including myself, but this is the economic reality we face today."

The grim reality is Cook County next year faces a category four economic hurricane rather than a category five -- and that passes as progress.

Nevertheless, by insisting on moving forward with the .25 percent of a penny sales tax roll-back, Preckwinkle is adding to her burden of balancing Cook County's budget. It also means that employee layoffs are likely. And Employee layoffs would only burden the regional economy by eroding consumer spending further.

In fact, local government layoffs across the United States and in Illinois are increasingly viewed as the key drag on the floundering recovery.

A recent New York Times article, "Public Workers Face New Rash of Layoffs, Hurting Recovery," noted, "...the public sector has shrunk by 706,000 jobs. The losses appeared to be tapering off earlier this year, but have accelerated for the last three months, creating the single biggest drag on the recovery in many areas."

In Illinois, the latest unemployment numbers reveal that, after the construction sector, government, is the second biggest sector to lose jobs in the last 12 months, shedding 11,200 jobs since May 2011. Those are 11,200 fewer middle class Illinois consumers.

Preckwinkle has argued, much like a supply-side Republican, that cutting the sales tax will foster economic growth in Cook County. Thus, it would seem that after the earlier sales tax roll-backs, the burden of unemployed individuals resorting to the county hospital system should have lessened. It has not.

If the choice to bail out the next Cook County budget boils down to rolling back the .25 percent of the Stroger sales tax cut or letting heads roll at the county, the for the sake of the workers, their families, and the local economy, Preckwinkle should delay the roll-back.

Austerity for the sake of austerity by governments is a growing threat to economic recovery in the United States and abroad.




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