CHICAGO – Cook County, Ill. faces a projected $152 million shortfall next year, according to the preliminary 2014 budget released Thursday by Cook County Board President Toni Preckwinkle.
The shortfall is down from the $267.5 million gap last year and the $315.2 million deficit a year earlier. Preckwinkle addressed a $487 million gap in her first budget for 2011. Preckwinkle pledged not to seek a hike in property taxes or sales taxes to wipe out the red ink but did not rule out other tax or fee increases.
“We have reduced our deficit each year, even while rolling back the sales tax increase,” Preckwinkle, who leads the county which includes Chicago, said in a statement. “As the gap continues to close, it is increasingly difficult to reduce expenses and become more efficient, however, I am confident we will be able to make the tough decisions necessary to balance the budget without raising property or sales taxes.”
Increased spending demands of $166 million due to rising personnel expenses, employee health benefits and other non-personnel costs and a revenue loss of $60 million due to the sales tax rollback and recent reduction of the non-titled use tax are driving the deficit.
The county will see a positive net impact on its budget of $74 million from federal reimbursements due to the full implementation of Medicaid expansion under federal healthcare reform. That’s in addition to a $99 million positive net impact this year. The county won federal approval to begin enrolling certain patients at the Cook County Health and Hospitals System in the Affordable Care Act before it goes into full effect in January 2014.
The preliminary figures also warn that the county is on pace to close out the current budget with an $18 million shortfall. Preckwinkle has ordered departments to identify and eliminate 20% of vacant positions under her auspices and she has asked other county elected officials to consider doing the same.
“The President’s directive to reduce vacant positions will not only allow us to address the projected year-end deficit, but it will also have a significant impact on 2014 expenditures,” said Budget Director Andrea Gibson.
The county closed its deficit last year with a series of structural changes as well as a one-time influx of revenue from the Medicaid expansion. The county also implemented the final stage of a four-phase rollback of the unpopular 1% sales tax increase.
The 17-member board last November approved a final $2.9 billion spending plan for 2012 that largely adhered to Preckwinkle’s blueprint.
Standard & Poor’s rates the county AA. Fitch Ratings rates it AA-minus and Moody’s Investors Service rates it Aa3. Both Fitch and Moody’s have negative outlooks.
