CHICAGO - As expected, Cook County, Ill., Board President Todd Stroger vetoed a recent move by the board to roll back part of an unpopular sales tax increase that made Chicago's sales tax the highest in the nation.
But the 17-member board is likely to override Stroger at its next meeting, as 14 members - the number needed for such a move - have said they support the rollback.
Friday's veto marks the third time Stroger has rejected commissioners' efforts to cut in half the 1% sales tax hike implemented last year. The increase raised the county's share of the regional sales tax to 1.75%, and boosted Chicago's tax to 10.25%. The proposed 50% rollback would cut the city's sales tax to 9.75%.
In vetoing the measure, Stroger called the rollback "colossally irresponsible" and warned that the loss in revenues would mean up to 10% in cuts in county services. Cook is the second-largest county in the country.
The 1% tax hike was expected to bring in an additional $400 million in annual sales tax revenue. Officials have revised that figure downward several times due to the weak economy, but Stroger said the rollback would translate into a loss of up to $200 million next year. The county operates under a $3 billion budget.
Credit analysts have generally praised the tax as strengthening the county's fiscal position and have warned that a rollback would pressure Cook's balance sheet. The county was hit with two downgrades ahead of a new-money and refunding debt sale last month.
Fitch Ratings downgraded the credit one notch to AA-minus and assigned a stable outlook. Moody's Investors Service lowered the rating one notch to Aa3 with a stable outlook and Standard & Poor's affirmed its AA and stable outlook. Cook County has $3 billion of GO debt outstanding.
The board's next meeting is scheduled for Sept. 1.
