The Civic Federation of Chicago blasted Cook County Board President Todd Stroger’s proposed $3 billion fiscal 2010 budget as “an inadequate plan for uncertain times.”

In a 40-page budget analysis, the fiscal watchdog group criticized the budget for increasing spending, relying on an “unnecessary” sales tax hike, and including no structural reforms or cost savings.

The federation repeated its call for the County Board to repeal the unpopular 1% increase in the sales tax, which was implemented last year and boosted Chicago’s sales tax to 10.25%. The tax increase is expected to bring in hundreds of millions of dollars in additional annual revenue for the county.

“The county should abate the sales tax increase and make the painful but necessary prioritization of its spending in order to cut $377.7 million from its expenditures to subsequently balance its budget,” federation president Laurence Msall said in a statement accompanying the report.

In addition, county officials are overestimating how much the new sales tax increase will bring in, the group said. Officials estimate sales tax revenue in fiscal 2009 will total $651 million and $661 million in 2010, a 1.5% increase from 2009.

The group also criticizes an increase in the operating budget by 3.3% from last year at a time when other governments are cutting, and for funding most of its 2010 capital program with long-term general obligation debt.

Stroger’s proposal to borrow $162 million to finance capital maintenance and purchase equipment — such as vehicles and office furniture, which have relatively short lives — is not good government policy, the report said.

The group praised a few of the budget proposals, including setting aside $25 million to begin building up the county’s reserve and holding its property tax level flat for the 14th straight year.

Meanwhile, in contrast, the federation endorsed DuPage County’s proposed $521 million budget for minimizing increases to personnel expenses while maintaining funding for core operating programs and reducing its property tax levy.

DuPage, located directly west of Chicago, will reduce funding for capital, forging a transfer to the capital improvement fund and funding for new strategic initiatives in the next year to cover the impact of the levy reduction and maintenance of core programs. An infusion of $19 million in federal stimulus funds will also help, the watchdog group said.

The federation also praised the budget proposal for its “enhanced transparency,” which included “creating an online budget calendar and by instituting formal public hearings on the budget.”

The Civic Federation did raise concerns over DuPage’s optimistic sales tax projections of a 4.1% growth rate next year over 2009 levels.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.