CHICAGO – Cook County has released the preliminary forecast for its 2017 fiscal year budget, signaling that tough times and tax hikes may lie ahead for the county.
Toni Preckwinkle, Cook County board president, announced the preliminary budget, which was scheduled to be discussed at a July 19 public hearing.
In the announcement, Preckwinkle said there is a projected operating shortfall for the 2017 fiscal year of $174.3 million, which can be attributed to the stall in Illinois state budget, legacy debts and increased technology spending for old and outdated systems. The 2016 fiscal year budget will have a shortfall of $48 million, which the county plans to close through spending reductions.
Part of the deficit is coming from about $53.1 million owed by the state to the county, with an additional $57.4 million owed to the Cook County Health and Hospitals System from fiscal year 2016.
While Preckwinkle didn’t indicate how Cook County plans to recover the necessary funding, a tax increase could be on the way for the county.
“Good government requires revenues and spending to be equal,” Carol Portman, president at Taxpayers Federation of Illinois (TFI), told the Cook County Record. “When there is a deficit, the appropriate responses are to raise revenue - usually taxes - or cut spending, or a combination of both. And, we’ve seen both in Cook County. Recently, Preckwinkle did a lot of cutting early on, and she’s also raised the sales tax rate.”
Raising taxes in Cook County could be detrimental, as there have been high increases in some areas that could keep businesses away. The tax burden that already exists has many businesses locating just outside of the county border, providing them close proximity to Chicago without the tax hike of being in Cook County.
“A good tax structure is predictable,” said Portman “Many of TFI’s members aren’t thrilled about the taxes they pay today, but what gives them pause about expanding in Illinois right now is the uncertainty over what the taxes are going to look like tomorrow. I they knew they were facing an X percent increase, they would make their business or personnel decisions accordingly, but because they don’t know, they’re skittish. I think that is a bigger problem, at the state and local level right now, than the actual tax burden.”
In the announcement, Preckwinkle said her administration has faced hard fiscal times before and has worked to balance the budget through hard decisions. Mentioned was the elimination of $1.6 billion in operating deficits and reduction in the county’s workforce by 9.4 percent. This comes in addition to a decrease in the county’s operating tax allocations to the hospital systems by over $260 million.
An executive budget recommendation is expected in October. This will be followed by public hearings and a final vote in November.