Budget deal averts Cook County shutdown

March 1, 2008 5:19:04 PM PST
It is about to get more expensive to shop in Cook County. A late night deal to balance a $3 billion budget results in a big hike to the county sales tax.Chicago will have the highest sales tax rate of any major city in the country. The budget deal also includes restructuring the county health care system.

The budget breakthrough came after months of nasty board battles.

It was close to o1 a.m. when, by a tally of 10 to 7, the Cook County Board ended a five-month impasse, voting to approve a budget that, among other things, will more than double the county's portion of the sales tax.

"Good government is when the right thing happens. So, today is good government," Stroger said.

Beginning in November, the sales tax charged by Cook County on most goods and services will more than double to 1.75 percent, meaning the total sales tax for the city of Chicago will go up to 10.25 percent. In the county's suburbs, the tax will start at 9 percent. When the increase goes into effect, Chicago will have the highest sales tax rate of any big city in the country.

What does all this really mean for the average consumer?

Essentially, it translates to an extra dollar tacked on to every $100 purchase. More simply, a penny more per dollar spent.

"I think we'll all be affected because everything else has gone up, and that just adds to it. Even if it's a couple of cents on everything that you buy," said Cook County resident Carol Donnelly.

Pushed through by board President Todd Stroger, the sales boost is meant to close more than $200 million budget gap in the county's finances and will raise an estimated $426 million starting in 2009.

Opponents of the tax argue that the increase will cost jobs, as businesses lose customers to suburbs with lower tax rates.

"The argument that the sales tax is going to help the poor, to me, is not true. You're asking the poor to help themselves. If they're poor, they cannot support a sales tax," Cook County Commissioner Roberto Maldonado said.

The tax will be added to nearly all goods and services sold in the county. Clothing and gasoline will go up, as will sitting down to eat a meal in a restaurant. But, essential goods, such as food and prescription drugs, will not be affected.

Will people really go elsewhere to purchase their goods?

In the collar counties, the sales tax is considerably lower than in Cook, starting at around 6.25 percent.

"I probably would [buy outside of Cook County] because I work outside the county. So, I'd probably spend most of my money out there," said resident Pete Pavkovic.

"Not just for a penny. It doesn't make a difference. I don't think you'll notice it," another Cook county resident told ABC7 Chicago.

"You have to bite the bullet because then gas will cost you more money," said one other resident.

Another tax that will increase is the parking tax. Typical users will see an increase of double from, for example, $20 per month to $40 per month for the average person that parks in the parking lots and garages within Cook County.

The sales tax increase will come in addition to the .25 percent increase passed in February to bail out mass transit.

In return for the tax increase, Board President Todd Stroger will give up control of the county hospital and other health facilities to an independent board. That board's nine members will be tasked with improving hospital operations. They will be nominated by medical, civic and labor leaders and approved by county commissioners.

The deal calls for the independent board to serve until 2010.

Commissioner Larry Suffredin's vote made the deal possible, who opposed the sales tax hike but sees the hospital deal as a win. But, not everyone agrees with him.

"They're not going to do absolutely anything to bring about the change that we need?to bring more Latino doctors, more bilingual nurses because that's exactly what we need," Commissioner Roberto Maldonado said.

"This is a victory to get this hospital to have independent governance. This is a victory to keep the court systems open, to keep the other functions of county government open and not to be laying off innocent people," said Suffredin.

Suffredin said he hoped state lawmakers would make the governing board permanent, eventually.

Statement regarding Cook County budget From Jerry Roper, President and CEO, Chicagoland Chamber of Commerce

 

"Even before this vote, the people and businesses in the Chicago region were shouldering more than $800 million in new taxes this year, and now will pay millions more to support an incredibly inefficient County government," said Jerry Roper. "Chicago now has the unfortunate notoriety of having the highest sales tax in the country, and our region will now be a more expensive place to visit, live, work and operate a business. This impacts our jobs climate and makes our region more expensive and less competitive as our country lies on the brink of recession."

"There was a true opportunity this year to build on the reforms initiated last year. Cook County officials squandered this opportunity, and instead will be adding hundreds of new employees to the county payroll. The people of our region should be outraged," Roper added.

Top National Sales Tax Rates:

Chicago 10.25% (includes 1% Cook County increase)

Memphis 9.25%

New Orleans 9.0%

New York City 8.375%

Los Angeles 8.25%

 

Overview of Tax Increases in the Chicago region:

November 2007: City of Chicago tax/fee increases - $270 million

January 2008: CTA/RTA .25% Sales and Real Estate Transfer Tax increases
- $530 million

February 2008: Cook County 1% Sales Tax increase - $425 million

Dramatic showdown

Friday afternoon a group of county officials filed a lawsuit in Cook County Circuit Court asking a judge to intervene in the ongoing budget dispute.

Board President Todd Stroger, State's Attorney Dick Devine and Cook County Sheriff Thomas Dart filed the lawsuit anticipating difficulty finding a judge Saturday, if the board does not resolve the budget issue by the deadline. They asked a judge to order emergency services to remain open.

"Right now, we have a situation where it's more about personality than it is about the county," said Cook County Board President Todd Stroger.

President Stroger, who does not have a vote on the budget, said the four Democratic holdouts are more concerned about politics, including what offices they might run for in the future and personal dislike for him.

"This is like kindergarten. Take your personalities out. I'll take mine out," Stroger said.

Only one of the anti-tax Democrats is needed to break the stalemate. They include self-styled reformers Forrest Claypool, Mike Quigley and Larry Suffredin, joined by Roberto Maldonado. While some of the four have offered lesser sales tax increases, all oppose Stroger's recommended 1.25 percent.

"If you want a legislative body that does nothing but agree, I think you're going to have higher taxes," said Commissioner Mike Quigley.

But none of the four will agree to spending reductions, especially at county hospitals and clinics, that become necessary without the tax increase.

Republican Tim Schneider, who supports spending cuts, cannot understand.

"We have a group of reform commissioners who, at this point, want to have it both ways. They don't want to vote for taxes, but they don't want to make the cuts necessary to balance this budget," he said.

Stroger's lawyers had already drafted the lawsuit earlier Friday to ask the courts to intervene should the board stalemate continue past midnight. The lawsuit asks that the 17 commissioners literally be locked in their chambers until they resolve their differences.

" They will say you have to pass a budget. That's the responsibility of this board," said Commissioner John Daley.

Finance Committee Chairman Daley suddenly canceled a 3:30 p.m. meeting of his committee Friday to again have more budget discussions. He set that meeting back until 6 p.m., when the county board was set to meet again to try to settle the budget impasse that could lead to a county government shut down at midnight.


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