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Preckwinkle blames state lawmakers for proposed sales tax hike

Wednesday, July 01, 2015
Crain's Chicago Business
by Greg Hinz

Blame state lawmakers, not me. That's the message today from Cook County Board President Toni Preckwinkle as she goes on the offensive on behalf of her proposal for a penny-on-the-dollar hike in the county's sales tax. That would force most county residents to pay an overall tax of more than 10 percent every time they go to the store. In an appearance at the City Club this morning and a statement—Preckwinkle also is scheduled to speak with Crain's editorial board later today—the county board chief said the Legislature's failure to deal with a pension reform bill she originally filed more than a year ago has forced county finances to the breaking point, with its unfunded pension liability rising $30 million a month. "While I am still willing to work with the governor and the legislative leaders to secure our pension reform, I refuse to wait and kick the can down the road to bankruptcy," Preckwinkle said. "The more you kick the can, the heavier and bigger it gets, until one day, it kicks back." Despite the president's offensive, the proposed levy has opposition on the county board and its ultimate passage is uncertain. Preckwinkle did not mention the possibility of raising the levy in her re-election campaign last year and, in fact, she bragged about slashing a previous increase in the levy that was imposed by then-board chief Todd Stroger. She said she would "re-evaluate the county's revenue needs and make the appropriate changes to the sales tax levy" if her pension reform plan is adopted. But she did not get more specific, arguing only that, unlike Stroger, she has made county government much more efficient, with fewer workers on the payroll and outstanding bonded debt down $236 million. Preckwinkle said the levy would pull in a projected $308 million a year, 90 percent of which would go to pensions. She said she has ordered her financial team to come up with another $100 million a year in cuts, including implementing an automated timekeeping system, slashing vacant positions, cutting the county's fleet of vehicles and conducting an audit to ensure that only eligible workers get county benefits. Word that Preckwinkle was considering restoring the sales tax to the original Stroger size leaked out last week after she began meeting with commissioners to get their support. A vote could come at almost any time, even though the actual county budget for 2016 will not be introduced until the fall. Preckwinkle at one time was considering a hike in the county's property tax, which has not gone up since 1994, but apparently ran into strong opposition. 3 p.m. update: In her meeting with Crain's editors, Preckwinkle solidly stuck to her guns—and said Rauner "lied" to her. Asked why the tax hike will come up for a vote in July when the full county budget won’t even be submitted until October, Preckwinkle said that’s because the county has to notify the state by Oct. 1 if it wants to collect the additional revenues in the first half of 2016. Any request after that would delay the beginning of collections until the second half of next year. If her pension bill were revived in Springfield, the county’s need for new money to pay pension debts next year would be cut in half, from $270 million to $147 million, Preckwinkle added. That’s because the pending legislation includes some employee give-backs and lesser benefits. But even then, she wouldn’t say if the one-penny tax would be wholly or partially repealed, only that she’d "re-evaluate" the need for revenue, saying that her financial team would have to fully review matters first. And why didn’t she figure out before last year’s election that the county would need a big new cash influx? Because the Legislature didn’t block her bill until this spring, she said—in part because Rauner lied about earlier backing, not making it clear until late in the session that his support was contingent on Preckwinkle backing his "turnaround" agenda. Preckwinkle did say she personally would prefer a property tax increase to a sales tax hike, but that idea had “no votes” among other commissioners.

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