CHICAGO - A controversial sales tax increase in Cook County, Ill., will remain in place after county commissioners who were attempting to roll back the tax hike lost a bitter, months-long battle Tuesday.
The tax increase is expected to bring in at least $200 million in additional annual revenue for the county, which two rating agencies downgraded recently in part due to declining revenues.
Board President Todd Stroger three times vetoed the board's efforts to roll back 50% of the 1% tax increase. Tuesday's meeting came as anti-tax commissioners thought they had enough votes - 14 out of the 17-member board - to override Stroger's veto. But at the last minute, Commissioner Deborah Sims sided with Stroger, sinking the rollback effort.
The sales tax increase - approved by the board last year - pushed Chicago's sales tax to 10.25%, and the county's portion to 1.75% from 0.75%. The tax hike sparked criticism from the public and Chicago media, and several commissioners spent the last few months trying to roll part of it back.
Stroger had warned that the rollback would mean the loss of hundreds of millions of dollars in annual revenue and draconian cuts in the county's health care system. He praised the commissioners who voted against the rollback in Tuesday's meeting.
"Today these commissioners stood not just with me, but with the people of this county," Stroger said. "Together, we have put people's need for vital services ahead of a bogus economic strategy that would have threatened our health care safety net at a time when ordinary people need these services now more than ever."
Credit analysts have generally praised the tax as strengthening the county's fiscal position and 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.
