Cook makes Will the land of milk, honey
Monday, September 22, 2008
by KRISTEN MCQUEARY
So. Explain once more why CookCounty must borrow $3.75 billion just two months after the county sales tax doubled?
I flipped my Rolodex to Donna Dunnings, county finance director.
She was not in the office, her secretary said. She transferred me to the comptroller's office.
Nobody there could answer my questions. I would have to fill out a Freedom of Information Act request, the receptionist informed me.
I told them to suck an egg, basically, as I searched my desk for Tums.
I then was transferred to the county's general operator, who sent me back to the comptroller, where no one would take a message. Can't they just pretend?
I left messages with two of board President Todd Stroger's spokesmen, Gene Mullins and James Ramos.
No return phone calls.
I phoned WillCounty, just for kicks.
John Gerl, chairman of WillCounty's finance committee and a CPA, explained that despite being the third-largest county in Illinois and the fastest growing, WillCounty has not borrowed money to pay for operating expenses.
The county is carrying about $100 million in general obligation bond debt, mostly from a new jail.
Will County's pension budget is 99 percent funded, unlike CookCounty, which will use some of the $3.75 billion in borrowed money to pay pension costs.
Gerl earns about $22,000 as a county board member. CookCounty commissioners earn more than $80,000.
Sure, WillCounty is smaller, but it has a jail, a nursing home, a court system and a health department. It doesn't have many of CookCounty's problems, but it also doesn't have CookCounty's 5 million residents paying property taxes and sky-high sales taxes to fund it.
Will County has not issued a tax anticipation warrant in 15 years, unlike CookCounty, which approved a $150 million note this summer in anticipation of the sales tax revenue.
"Once you create that monster, which they've done in CookCounty, it takes a collaborative effort by the board and the president to set their mind to reducing the size of government. They let it get away from them. That's something we have not done," Gerl said.
Will CountyExecutive Larry Walsh - Stroger's counterpart - sent a memo last week to department heads. Salaries and wages comprise 73 percent of the county's overall budget, down from 82 percent in 2005.
Gee, shrinking government. What a weird concept.
CookCounty financial officials say they will do several things with the $3.75 billion. They'll sell $3 billion in general obligation bonds to refinance existing debt and try to get a better interest rate. That's OK. That's smart, if the market will tolerate it.
But they also will borrow $750 million on top of that to pay down pension debt; to repair county facilities; and to pay lawsuit settlements, most of which stem from the county's health system.
Commissioners who signed off on the deal say it's no big deal. All governments do it.
"We are refinancing outstanding general obligation bonds at a lower rate," Commissioner Joan Murphy (D-Crestwood) said. "All this ranting and raving about it costing taxpayers - it isn't going to cost us one penny."
Somehow, I just don't believe that's true. Refinancing $3 billion might save money in the long haul, but borrowing $750 million for day-to-day expenses will cost taxpayers eventually.
Where do we find money next year, and the year after that, for pensions and lawsuits and sidewalks? We'll be trying to find money for that, in addition to repaying the $750 million.
Stroger must be hiding a winning Lottery ticket in his breast pocket. Maybe lending institutions have suddenly agreed to take Monopoly money. Perhaps we can fake them out with those gold-foil chocolates. Come on. They look like real coins.
Republican Elizabeth Doody Gorman (R-OrlandPark) voted for the refinancing but said she won concessions from Stroger. The financial team must return to the county board for final approval before selling a single bond.
"I was against the sales tax, but this is a separate issue," Gorman said. "We are not increasing the levy. This is not a property tax increase. It is not costing taxpayers anything."
Again, I just don't believe this deal costs us nothing. It doesn't make sense.
Commissioners Mike Quigley (D-Chicago), Larry Suffredin (D-Evanston), Tony Peraica (R-Riverside) and Forrest Claypool (D-Chicago) voted it down.
"I don't have a problem with legitimate capital expenditures and I don't have a problem with refinancing, if we could save money," Claypool said. "But they are using this as an opportunity to borrow money to pay the bills and to give Stroger some 'play money' before the election. If he can't pay the bills after hitting taxpayers with a $426 million tax hike, what does that say about his ability to run county government?"
So back to that sales tax increase, which took effect July 1. The county has not yet received the money. The state collects it; the first payment comes in October. It's obviously already spent.
The next election is 2010, people.
Now, where the heck are those Tums?
Kristen McQueary covers government and politics for the SouthtownStar. She can be reached at (708) 633-5972 or email@example.com.