On December 15, a respected Chicago civic institution offered the Cook County (Illinois) Board of Commissioners advice on how to balance its fiscal 2004 budget with spending cuts, not tax hikes. Several key commissioners agreed and may force the Board to cut spending from the projected $2.9 billion budget.
“We call on Cook County officials to balance their budget without raising taxes,” said Civic Federation President Laurence Msall. “There are many other ways the county’s budget can be balanced without layoffs or service cuts.
“Although a vote on the county’s fiscal 2004 $2.9 billion budget was postponed,” Msall continued, “commissioners continue to discuss unnecessary tax increases. The Civic Federation has maintained that county officials could balance the budget with a number of alternative strategies.”
County Board President John Stroger’s proposal to increase the local sales tax was stalemated in November, and Commissioner Roberto Maldonado has offered a cigarette tax hike as an alternative. That proposal has not been warmly received, and many commissioners appear ready to push spending restraints instead.
The county’s current cigarette tax is 18 cents a pack; Maldonado, with Stroger’s support, has proposed raising it by 82 cents. Opponents of the increase say it would drive smokers out of the county to purchase their cigarettes.
With the current county tax, plus the state tax of 98 cents and the city tax of 16 cents, the per-pack price for many popular brands of cigarettes in Chicago is $4.83. Maldonado’s increase would push that to $5.65. In nearby Hammond, Indiana, the same pack of cigarettes sells for $3.53 on average.
On December 31, County Commissioner Earlean Collins released an alternative strategy for balancing the county budget by cutting costs, not increasing taxes. Collins explained to the Chicago Sun-Times that too much spending, not too little revenue, is the source of the county’s budget problem. “Over the past four years,” Collins noted, “revenue has exceeded projections by 2 percent. There is no reason to believe this trend will not continue, meaning $120 million more in revenue will be available in fiscal year 2004 than expected.”
In a year-end report to commissioners, Collins suggested freezing general fund appropriations at the 2003 level with the exception of the Bureau of Health and the Board of Elections; eliminating all non-essential job positions that have been vacant for at least a year; and reducing the corporate fund balance from 9 percent to 5 percent. “If they balance the budget without [a tax increase], you’ve got my vote and this proves it can be done,” Collins said.
Collins’ approach should meet with the Civic Federation’s approval. In the analysis and recommendations it released on November 19, the group offered the following specific ways to “improve Cook County’s revenue stream and financial management.”
- Stroger should use the budget authority he already possesses as County President to control spending, including spending by other elected officials.
- County officials should implement recommendations contained in the 2001 County Operations Review Team (CORT) report. The report presented 117 recommendations identifying as much as $129 million in savings. Most of those recommendations have not been implemented to date.
- The County should eliminate automatic “step” wage increases for employees, who also receive annual cost of living increases. The step increase costs $26 million a year.
- The County should pursue joint purchasing of health insurance with other local governments, which could result in annual savings of as much as $22.5 million. Employee co-payments for doctor visits should be increased from $3 to $10 a visit, saving the County as much as $7.5 million annually.
- Janitorial services should be removed from the jurisdiction of the Sheriff’s office and outsourced, for annual savings of as much as $5 million.
“While Cook County faces a short-term problem in eliminating an $86 million deficit in 2004, it faces a much bigger long-term problem: How to make Cook County government operate more efficiently,” said Msall. “There is no shortage of long-term cost-cutting ideas from civic organizations and the county’s own research reports. Most of these recommendations have yet to be acted upon.
“Cook County government must put its fiscal house in order,” Msall insisted, “and imposing fiscal discipline and implementing management efficiencies should be the first line of attack. Only as a last resort should tax increases even be considered.”
“I commend her [Collins] because she took a very courageous stand,” said County Commissioner Mike Quigley. “He [Stroger] doesn’t have the votes for his budget. He could veto our cost-cutting budget, and then we’d be staring at each other.”
Stroger’s spokeswoman, Caryn Stancik, said he is “reviewing Collins’ proposals and plans to meet with her soon.”
Collins, who said Stroger “has shown a more cooperative spirit” since she issued her proposal, denied feeling any pressure as a key vote. “I’m pressure-proof,” she said.
State law says the budget must be passed by the end of February. No date has been set for a budget vote.
John Skorburg is managing editor of Budget & Tax News. His email address is [email protected].