Sales tax rollback contributes to Cook County budget deficit
An upcoming one-quarter-point rollback in the Cook County sales tax and uncollected medical bills are putting the county $267.5 million in the red next year, a preliminary budget shows.
County President Toni Preckwinkle said a partial hiring freeze will help make up the shortfall.
Preckwinkle released estimates of the $2.9 billion budget Wednesday, noting that $152 million of the expected shortfall is related to patients not paying bills at the county’s hospital system, and $87.8 million is caused by the quarter-point rollback of the county’s sales tax that takes effect Jan. 1.
The rollback will be the third reduction of the sales tax since Preckwinkle took office. A key point of her 2010 election campaign was the elimination of a 1-percentage-point increase to the county’s sales tax that occurred under former board President Todd Stroger.
“The financial impact of the rollback is lower than expected (this year) and a sign that the tax cut is doing what we expected it to do: help residents and businesses in a difficult economy,” Preckwinkle said. “It is the anemic recovery of our economy that is the driver of our shortfalls.”
Many of the patients receiving treatment through the county’s network of clinics and hospitals don’t have insurance to cover the cost of their treatments, Preckwinkle said. She said studies show 85 percent of the patients treated at county clinics are “self-payers” and 55 percent of the patients at hospitals fall in the same category. Preckwinkle said such patients often “can’t pay” for their medical care.
In order to help close the budget gap, Preckwinkle said the county will institute a partial hiring freeze on any positions vacated by retirements. Vacant positions required by law or that reduce overtime will be filled, she said.
Andrea Gibson, the county’s budget director, said about 600 county employees have retired each of the past two years, but many of those positions were refilled. So far this year, about 300 employees have retired and county officials said they are not planning to fill any positions that are vacated the remainder of the year.
Gibson wouldn’t estimate how much the county expected to save. Gibson also said there are no plans to offer incentives for county employees to retire.
County officials said attrition is the key method expected to close the remaining $22.4 million gap in the current year’s budget. The county started with a $315 million shortfall this year and a $487 million shortfall the year before.
By the end of the fiscal year, the county expects to save $219 million through structural and operational changes, including layoffs, county officials said. Another $25 million was saved through debt restructuring. County revenues increased by $52 million more than originally estimated, mainly from tax hikes on tobacco, alcohol and motorists. Another $19 million came from “one-time fixes” like lawsuit settlements, officials said.
Preckwinkle has scheduled a public hearing on the budget for 5 p.m. Wednesday, July 18, at the Cook County Building, 69 W. Washington St., Chicago. More information can be found at cookcountyil.gov/budget.
The new fiscal year begins Dec. 1.