Cook County Board President Toni Preckwinkle’s administration is warning of 10 percent budget reductions if a judge doesn’t allow a countywide sweetened beverage tax to take effect by August.
In a letter dated Monday sent to all county elected officials, bureau chiefs and department heads, Preckwinkle budget director Tanya Anthony said analysts would be providing them “a recommended course of action” to meet spending cuts needed if Cook County Circuit Judge Daniel Kubasiak doesn’t lift a temporary restraining order that’s preventing the penny-per-ounce tax from being levied.
Kubasiak stopped the tax, which was supposed to go into effect Saturday, after the Illinois Retail Merchants Association and several grocers sued the county to permanently block it on the grounds it is vague and unconstitutional.
The county was counting on $67.5 million to be collected through Nov. 30 via the tax on pop and other drinks.
The recommended budget cuts “may include position reductions and non-personnel reductions,” according to Anthony’s letter, which was obtained by the Tribune. Department heads will have until Friday to respond with any changes to those recommendations. That deadline is meant to give the county time to get ready to start implementing the reductions Aug. 1, the letter states.
Asked about the letter, Preckwinkle spokesman Frank Shuftan on Wednesday said the temporary restraining order left the county in “a serious financial situation and we have to be prepared to take serious action.”
“The steps outlined in the budget director’s letter are meant to inform and provide guidance to separately elected officials, bureau chiefs and department heads of what we are collectively facing and how we all must prepare to confront this significant potential revenue shortfall,” Shuftan said in a statement.
Kubasiak set a hearing on the preliminary injunction for July 12, so the temporary restraining order could get lifted then or at a subsequent hearing. But in enacting the order last week, the judge noted there would be no “reasonable procedure” for the county to refund the collected tax money to consumers in the event the retailers eventually win their suit and the beverage tax is permanently struck down.
Kubasiak also said the retailers “have persuaded the court that a fair question exists as to the constitutionality of the sweetened beverage tax.”
Given the possibility the tax will get struck down, Anthony’s letter says departments will also get new budget targets for 2018, when the county was counting on collecting $200.6 million from it. Preckwinkle could also opt to try to raise other taxes to make up the difference. She has said she plans to ask the state appellate court to vacate the temporary restraining order.
In a statement after the judge blocked the tax last week, Preckwinkle said she had asked the finance department to look at “all options to compensate for the revenue that would have been generated by the tax,” including job cuts.
