The Bond Buyer - - Front Page - By yvette ShieldS

to re­peal a con­tro­ver­sial sweet­ened bev­er­age tax, Cook County, Illi­nois board pres­i­dent Toni Preck­win­kle is sound­ing alarms over the bud­get cuts that will be needed to off­set the loss of $200 mil­lion in rev­enue . . . . . . . . . . . . . . .

CHICAGO – With her com­mis­sion­ers poised to re­peal a con­tro­ver­sial sweet­ened bev­er­age tax, Cook County, Illi­nois board pres­i­dent Toni Preck­win­kle is sound­ing alarms over the bud­get cuts that will be needed to off­set the loss of $200 mil­lion in rev­enue.

The re­peal mea­sure is up for de­bate and a vote in the county’s Fi­nance Com­mit­tee Tues­day and fi­nal ac­tion would come dur­ing a board meet­ing Wed­nes­day. Preck­win­kle broke a tie last year to en­act the tax that took ef­fect in Au­gust after a brief court-im­posed de­lay.

A ma­jor­ity of com­mis­sion­ers have now signed on to the re­peal with enough votes listed Friday to over­ride a veto, bar­ring a last minute change of heart by com­mis­sion­ers that re­cently flipped sides.

“Tak­ing away this rev­enue could re­sult in a re­ver­sal in the gov­ern­ment ef­fi­cien­cies we have cham­pi­oned over the past seven years,” Preck­win­kle warned in Thurs­day as she un­veiled a nearly $5.4 bil­lion bud­get for fis­cal 2018 which be­gins Dec. 1. The op­er­at­ing por­tion of the bud­get to­tals $4.9 bil­lion, an in­crease of $512 mil­lion or 11.6% from fis­cal 2017, and the cap­i­tal por­tion to­tals $476.5 mil­lion.

The latest ver­sion of the re­peal mea­sure would push back the ef­fec­tive date to the new fis­cal year. Preck­win­kle said there’s lit­tle “fat” still to cut after shrink­ing the work­force by more than 10%, clos­ing bud­get gaps of $1.8 bil­lion, and re­duc­ing debt by 11% since she took of­fice in 2010.

“A vote to re­peal is a vote against pro­mot­ing bet­ter health out­comes for peo­ple in com­mu­ni­ties across the county, es­pe­cially our most vul­ner­a­ble,” she said warn­ing of the pos­si­ble clo­sure of com­mu­nity health­care cen­ters, hospi­tal cuts, and a pos­si­ble 11% across-the­board cut that would harm the state’s at­tor­ney and pub­lic de­fender’s of­fices.

Preck­win­kle has said she ex­pects com­mis­sion­ers who sup­port the re­peal to iden­tify pro­grams and ser­vice cuts to make up the $200 mil­lion an­nual rev­enue loss to the county of more than 5.2 mil­lion peo­ple.

The county turned to the soda tax last year as a means to tackle $174 mil­lion of red ink with­out cut­ting deeply into health­care and pub­lic safety ser­vices. It fol­lowed the ear­lier pas­sage of a sales tax hike to bol­ster pen­sion fund con­tri­bu­tions. County res­i­dents who live in Chicago have also been hit with prop­erty tax hikes and the state re­cently raised the in­come tax.

Pub­lic de­bate has been grow­ing over the tax with op­po­nents – led by bev­er­age and mer­chants groups – fi­nanc­ing tele­vi­sion and ra­dio ad­ver­tise­ments slam­ming the tax as too costly to both the pub­lic and busi­nesses as res­i­dents flee county lines to make their pur­chases. The ad­ver­tise­ments ac­cuse sup­port­ers of falsely por­tray­ing the tax as a health-re­lated en­deavor aimed to re­duc­ing con­sump­tion of bev­er­ages that health ex­perts warn con­trib­ute to obe­sity and dis­eases such as di­a­betes.

Health ad­vo­cates and or­ga­ni­za­tions have de­fended the tax in ads fi­nanced by former New York Mayor Michael Bloomberg.

The tax cov­ers most sweet­ened bev­er­ages and sports drinks, even those with non-caloric ar­ti­fi­cial sweet­en­ers, while leav­ing out 100% fruit juices, milk and in­fant for­mula.

The county’s general obli­ga­tion bonds are rated A2 by Moody’s In­vestors Ser­vice, AA-mi­nus by S&P Global Ser­vices, and A-plus by Fitch Rat­ings. Ahead of a re­fund­ing last year, Moody’s and Fitch re­vised the county’s out­look to sta­ble from neg­a­tive while S&P down­graded it one notch. S&P as­signs a sta­ble out­look.

The county is tap­ping the 1% sales tax hike to cover sup­ple­men­tal pay­ments to its pen­sion fund to bring the sys­tem to a 90% funded ra­tio in 2046. The county’s sys­tem car­ries $5.9 bil­lion of un­funded obli­ga­tion that are 60% funded. The county needs state ap­proval for the changes to take ef­fect. ◽

A soda tax re­peal means bud­get cuts, said Cook County’s Toni Preck­win­kle.

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