Cook County Saved?

the fiscal problems are nothing new

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Originally published in New Ground 117, March — April, 2008.

by Bob Roman

Supporters of county health care services (and supporters of county government in general) had some reasons to celebrate on March first after the Cook County Board, very much at the last minute and by the skin of their teeth, passed a “balanced” budget that preserves County services, including health care. Better still, from the perspective of the Emergency Network to Save Cook County Health Services, was the passage of an ordinance that essentially puts the county’s Bureau of Health Services into receivership. The ordinance passed is largely the ordinance proposed by the Network except for one major pill embedded in the dog food. The original legislation proposed a board formed entirely independently of County government by representatives from a list of stakeholder organizations. As passed, representatives from a select list of “stakeholder” organizations will meet to nominate candidates for the independent board. From that list of 20 candidates, Todd Stroger (as County President) will select 9 board members. This board will be expected to reorganize the Bureau into a reasonably efficient organization, including setting up a billing system that will allow for greater reimbursement from Medicare and Medicaid. After three years, unless the County Board decides otherwise, management of the Bureau will return to the County Board.

The reform ordinance was a way of taking health services out of the stalemate between those wanted to raise taxes and were defensive regarding management and those who, out of opportunism or out of middle class outrage or out of a hidden libertarian agenda, felt no tax increase was necessary but a lot of “fat cutting” was.

The Emergency Network to Save Cook County Health Services was formed early last year with the blessings and support of AFSCME and SEIU when it became obvious that Cook County was headed for a fiscal crash landing with health services being one of the biggest casualties. Chicago DSA signed on in October. Based at Citizen Action/Illinois, it did a great deal of the coalition building necessary for this victory. Some of the members do not love some of the others though apparently they worked together well enough while facing the crisis. Afterwards, the self-congratulations often did not credit others in the effort.

A great deal of credit also belongs to Chicago Federation of Labor President Dennis Gannon. By some accounts, his shuttle diplomacy at the climax pretty much clinched the deal between County President Todd Stroger, liberal board member and swing vote Larry Suffredin, and some of the other stakeholders. The tax increases were no larger than immediately necessary and the health services reform ordinance was largely what the Network had proposed albeit possibly less “independent.”

Taxes were the big story for the mainstream media. This increase will make the sales tax in Chicago the highest in the nation. In addition to being regressive, it will likely discourage commerce compared to the suburbs. But this is only a small part of the story. The sales tax increase is estimated to be worth $400 million in additional revenue per year but only brings $74 million (the increase happens just in time for Christmas shopping) against the estimated $234 million deficit this year. The rest of this year’s deficit is being made up by the anticipated surplus next year. But according to the Center for Tax and Budget Accountability, Cook County’s revenue problems are primarily structural. The taxes the County has available to it will not cover the anticipated increases in expenses. If this year’s deficit was about $200 million, next year’s will likely be about $400 million. The problem is resolved for this year, and with management efficiencies maybe next year, but feces will be airborne again in 2010.

In this context, a possibly independent and professional board may be a risky victory. Stroger is certainly sensitive to the issues of services and good jobs in “The Community.” Cynics, with more than a little justification, will sneer “patronage” instead. Yet most patronage these days is not in the form of jobs but in the form of contracts. Politics is nowhere near as labor-intensive as it once was; money counts for more. If County finances become impossible, what better armor for a politician’s hind end than an independent board to make nasty decisions like privatization or massive cuts?

The other part of the tax story, though, is the money not being collected. Some of this is part of the current left critique: the ubiquitous Tax Increment Financing districts that skim increases in property tax revenue to opaque and unaccountable local projects. But with regard to property taxes, there is always a considerable pool of other money that is not being collected. Tax bills that are being appealed, bills that are being contested in court, bills that are being settled for change on the dollar, bills that won’t ever be paid. Likewise, the sales tax is also evaded. How many dollars are missing? It can amount to more money than you might expect, but that’s a subject for another story.