Cook County has a new $3.1 billion 2012 budget that relies on 10 furlough days to avoid substantial layoffs and rolls back an unpopular sales-tax increase starting next year. The budget balances a record $487 million shortfall.
As recommended by new President Toni Preckwinkle, the spending plan relies on restructuring a chunk of the county’s debt to achieve savings and push off near-term debt service payments. Cook has $3.8 billion of outstanding bonds and, under the plan, would restructure $271 million as soon as April.
Preckwinkle’s 2011 budget would push off $87 million of debt-service payments due in 2011, reducing them to $126 million from $213 million. The county also plans to restructure $92 million of payments scheduled for 2012 and 2013, said chief financial officer Tariq Malhance.
The refunded bonds will likely include a mix of tax-exempt bonds and taxable pension bonds sold in 2010. The restructuring will increase debt-service payments from 2014 through 2031, Malhance said.
Officials expect the refunding to generate $60 million in net present-value savings, which will be used to cut the deficit. Officials hope to offer the refunding in April or May. A request for proposals for underwriters and bond counsel could be sent out as early as March.
The final budget relies on 10 unpaid days off to save 550 jobs — instead of 1,300 — and $35 million. The county board voted 12-5 to cut the sales-tax hike by half in 2012 and the remaining half in fiscal 2013, finalizing one of Preckwinkle’s top campaign promises.
Former Cook board President Todd Stroger passed the 1% sales tax increase in 2008, and some have said it was responsible for his loss to Preckwinkle in last year’s Democratic primary.
