CHICAGO, June 27 (Reuters) - Cook County, Illinois, is facing a $267.5 million fiscal 2013 budget gap due to a planned rollback of the sales tax rate and a decline in other revenue, including patient fees at public hospitals, officials said on Wednesday.
The second largest county in the United States and home of Chicago is projecting $1.98 billion in general fund revenue in the fiscal year that begins in December and $2.25 billion in expenditures. The funding gap is smaller than shortfalls of $487 million in fiscal 2011 and $315 million in fiscal 2012.
“This preliminary budget forecast is evidence we are making progress, but more work needs to be done to achieve the fiscal strength that I want on behalf of county taxpayers,” Cook County Board President Toni Preckwinkle said in a statement.
She said the county would begin a hiring freeze for some unfilled jobs and that it would work to reduce costs related to elections.
The budget forecast shows sales tax revenue falling by $87.8 million due to a 25 percent rate reduction, while the health care system is facing a $152 million shortfall. Revenue from the county’s tobacco and gasoline taxes and from court filings is also expected to decline.
A rise in personnel costs mainly due to contractual wage increases is helping to drive expenses higher, according to the forecast.
Last year, Moody’s Investors Service and Fitch Ratings downgraded Cook County’s credit ratings, citing diminished financial flexibility. Moody’s cut the county’s general obligation rating to ‘Aa3’ from ‘Aa2’ in June 2011, and in September 2011 Fitch cut that rating to ‘AA-minus’ from ‘AA’.