Preckwinkle Submits FY 2012 Budget to County Board
Cook County Board President today presented her Executive Recommendation for the 2012 Budget to the Cook County Board of Commissioners outlining a budget proposal which reduces the budget by nearly 4%, makes long-term investments to address the structural deficit and continues to roll back the Stroger Sales Tax, a promise that President Preckwinkle made before taking office in December of 2010. The $2.9 Billion budget is the product of months of collaboration, and required tough choices from all parties involved. The FY2012 Executive Budget Recommendation is a comprehensive approach to increasing the fiscal responsibility of Cook County; incorporating key structural changes at all levels of government, targeted revenue enhancements that close loopholes and are aimed at improving collection, as well as other governmental reforms and innovations that save taxpayers money such as managed competition, energy savings and strategic sourcing. “I am confident that this is a fair budget that rests on a framework of long term financial management and strategic structural changes across county government,” said Cook County Board President Toni Preckwinkle. “This framework will allow us to make long-term investments in the County —keeping our commitment to rolling back the 2008 sales tax increase and investing in a 3-year plan to rebuild our suburban infrastructure. Less than 1% of the budget solutions are one-time fixes, instead we made strategic structural changes. This is the most fiscally sound and forward-thinking budget the County has seen in a generation.” The President’s budget features structural changes that yield $219 million in savings, financial management strategies that yield $25 million in savings, and revenue enhancements that yield $52 million in savings. The structural changes include key policy initiatives aimed at reducing costs and streamlining operations, as well as more than 1,000 layoffs throughout County offices, the majority of which take effect December 1st, which would save approximately $40 million. The revenue enhancements include fee increases, aligning taxes with other municipalities and parking fees. The County will also save $3 million on worker’s compensation costs based on recent expenditure trends, $1.8 million by eliminating the non-union step increases, and $2 million due to identifying the day after Thanksgiving as a County-wide shut down day. The President’s office also worked closely with the Cook County Health and Hospital (CCHHS) system to work towards a more financially self-sufficient operation. Through their collaborative efforts, Preckwinkle and CCHHS were able to narrow the gap between CCHHS’s budget request and the County’s subsidy. The County is providing $252 million, down from $276 million the previous year. “President Preckwinkle should be commended for working closely with CCHHHS to significantly streamline operations without negatively impacting patient care,” said Dr. Ramanathan Raju, CEO of CCHHS. “I look forward to working with her closely to continue to make CCHHS a model for public health institutions throughout the Country.” After years of mismanagement and a fundamental lack of planning in County government, President Preckwinkle released a preliminary budget in July of this year that projected the general fund shortfall between expected revenues and expenses to be $315 million. To close the gap, President Preckwinkle and the separately elected County officials worked together constantly to find innovative solutions to the current financial challenges without relying on one-time fixes and increasing property taxes on residents already burdened by difficult economic circumstances. “I made it a priority to institute best practices for financial planning and performance measurements to ensure that we are providing good services at a low cost to taxpayers,” Preckwinkle said. “This is a very difficult economic climate and this required shared sacrifice across the Board. I want to applaud the of the County’s elected officials in helping make this process so effective. This Budget is a reflection of how we are changing the financial landscape as well as the culture of Cook County government.” Cook County Commissioner John P. Daley, Chairman of the Finance Committee, commended President Preckwinkle’s comprehensive approach to a balanced budget solution. “President Preckwinkle has made fiscal responsibility a mandate for County government from her first day in office and this budget is evidence of someone who is willing to make tough choices to foster compromise, reorganize County government and do what’s right for the taxpayers of Cook County now and years down the road,” Daley said. Maintaining her commitment to transparency and accountability, President Preckwinkle has posted all Budget information to the Cook County Budget website, allowing users to engage with the President’s Office directly and comb through an unprecedented level of data. There will also be public hearings held on the 2012 Budget throughout the coming weeks. To view the Budget website, please go to: cookcountyil.gov/budget Highlights from President Preckwinkle’s 2012 Executive Budget Recommendation: With the 2012 budget, the public safety system set a goal of reducing the jail population by 1,000 persons by December 1, 2012. The financial savings of reducing the jail population from an estimated level on December 1, 2011 of approximately 8,500 to our goal of 7,500 is projected to be $5 million. The reduction will allow the Sheriff’s Office to close housing tiers in the jail. The S.T.A.R. Performance Management review sessions focused on discussion of strategies to reduce the jail population, including ways to increase the use of electronic monitoring and other tools, such as I-bonds and community-based alternatives. Analysis of detainee profiles projected that one thousand detainees currently held on non-violent offenses would be eligible for electronic monitoring or other alternative tools. The County is investing in more alternatives to detention at the Juvenile Temporary Detention Center (JTDC) and aims to lower the detention population over two years by investing in alternatives and closing down one of the nine JTDC centers by June, 2012, for a net savings of $1.6 million in 2012. By centralizing the five weekend bond court locations at the Criminal Courthouse in Chicago, the County will save $1.9 million across multiple departments. President Preckwinkle’s Budget Recommendation plans to end the taxpayer subsidy for policing 2% of unincorporated Cook County which would save $5.5 million this year, and accumulate future cost savings of more than $11 million. The Cook County Health and Hospitals System continues implementation of its strategic plan, Vision 2015. The strategic plan calls for a realignment of resources, shifting away from acute inpatient care at Provident and Oak Forest, while expanding availability of specialty services. Oak Forest inpatient services have been discontinued and services at the new regional outpatient center will be expanded. Provident Hospital will continue its transition to a regional outpatient center while decreasing inpatient service to 25 beds. Acute and clinical services at Stroger Hospital will expand, including transfer of the Family Residency Program from Provident Hospital to Stroger Hospital. The County is working to lower the cost of custodial services. Through a managed competition process, the current government workforce and potential private-sector companies will compete for the government contract. The Cook County Highway Department is restructuring how it handles snow emergencies and summer construction. Seasonal drivers will be hired to handle snow and ice removal. By employing seasonal workers instead of full time employees, the County will be able to increase the number of available snow plow operators during peak work periods. The change will save the County $200,000. In addition, engineering interns will be used to augment department construction during the summer months instead of full time engineering technicians. The program will also save the County approximately $200,000. The County is leveraging its Motor Fuel Tax (MFT) revenue distribution from the State to issues bonds for a $100 million program to support suburban highway construction and job creation. In addition to investing in the County’s infrastructure, this proposal will allow us to provide relief to the general fund, in the amount of $25 million to support court costs permitted by the MFT requirements Revenue Enhancements There are a total of 14 regulatory and/or revenue enhancement ordinances proposed for the FY 2012 Budget. These items include regulatory enhancements for the Department of Environmental Control; fee increases requested by the Recorder of Deeds; amendments to the Cook County Building Code; and various pieces affecting the Department of Revenue, including a levy on amusement devices. Listed below are specific revenue proposals included in the FY 2012 budget: This budget will ensure that all tobacco products, not just cigarettes are taxed. The Tobacco Tax Ordinance will be revised, closing loopholes, expanding the tax to other tobacco products. “Roll your own” tobacco products will be taxed on a per ounce base just like cigarettes. Through closing this loophole the County is expected to bring in an additional $12 million in revenue. The Use Tax rate will be aligned with other counties to fund increased road maintenance costs. The Use Tax only applies to the sale of titled property, such as cars, boats and yachts. The tax rate will be increased by 0.25%, remaining still 0.25% lower than the City of Chicago’s rate. The change will generate $14 million in revenue. The Alcoholic Beverage Tax rate has not been adjusted since 1989 and is far lower than the City of Chicago’s rate. For example the County tax on beer is $0.06 per gallon, while the City taxes at $0.29 per gallon. By adjusting the rate .50%, the County is projecting $10.9 million in additional revenue. Parking fees will be instituted at County facilities. Paid parking will be expanded to include the Criminal Court Building at 26th and California and suburban district courthouses at a fee of $4.75 per day or $65 per month. This is initiative is expected to generate $4 million in revenue. Lowering the sales tax rate increases economic activity, which raises business income and increases residents spending power. The 1% sales tax increase to be phased out began with the first 0.5% reduction in fall of 2010, next a 0.25% reduction on January 1, 2012 and the final 0.25% reduction on January 1, 2013. As a part of the City-County collaboration, the Cook County Department of Revenue is working with the City of Chicago Comptroller to share tax enforcement data and resources to increase compliance with similar City and County taxes. The City and County introduced an intergovernmental agreement to authorize data sharing and agreed upon investigative and enforcement procedures. The City and County plan to place business license holds on one another’s debtors and are discussing other tools to enhance enforcement. The Cook County Department of Revenue is also increasing investigative staff and working with the Sheriff to enhance investigations. Together, these initiatives are expected to result in $3.2 million in additional revenue.