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COOK COUNTY RECORD

Saturday, November 2, 2024

Cook County officials bank on legally imperiled beverage tax to balance county budget

Cook county board toni preckwinkle president

As a Cook County judge prepares to rule later this week on whether the county should be allowed to begin collecting its so-called sweetened beverage tax, county officials say the county has banked much of its budget hopes for the coming year on the $17 million a month in revenue they expect the tax will pour into county coffers.

At the same time, county officials also are eyeing potential federal Medicaid payments cuts. According to preliminary budget estimates, Cook County officials project the county could lose anywhere $300 million to $900 million that otherwise helps pay for medical services under the Senate's Better Care Reconciliation Act.

Officials in Cook County Board President Toni Preckwinkle's office played down the preliminary budget estimates released in June, describing them as a "first look" at what the office is working on.

But the beverage tax is key. Cook County Circuit Court Judge Danial Kubasiak issued a restraining order last month against enforcement of the tax at the request of the Illinois Retail Merchants Association and others. He is expected to rule July 28 on whether to slap an injunction on the tax over concerns on whether the tax is legal and constitutional.

"A positive outcome would allow our projected revenues to meet our expected expenditures, thus balancing the budget," said Frank Shuftan, Preckwinkle's spokesman.

A negative ruling on the beverage tax would mean revenues will be $17 million a month short of projections, Shuftan said. Preckwinkle's office has announced more than 300 employees would be laid off to deal with the current budget shortfall. And other county officers, including Cook County Sheriff Tom Dart and Cook County State's Attorney Kimberly Foxx, have similarly signalled layoffs could also occur in their offices if the tax is blocked.

In his ruling granting the restraining order, Kubasiak questioned the constitutionality of the 1-cent-per-ounce tax on a variety of beverages. Retailers want a permanent injunction, while the county wants the suit dismissed. He wondered aloud how the county would be able to refund the money should the tax ultimately be found to be unconstitutional.

"The court is fully aware of the importance of the tax to the defendant's budget," Kubasiak stated. "However, the court believes it is necessary to maintain the status quo in order to protect the interests of all consumers, all taxpayers and the affected merchants."

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