Cook County Health and Hospitals System CEO William Foley said this morning that the partial rollback of the county’s sales tax could have “huge implications” on the development of the health system’s strategic plan. The half-percent cut – if sustained – would deplete health system appropriations by $75 million.
On Monday, county commissioners voted to roll back one-half percent of the sales tax, creating a $32 million budget hole for 2010, which rises to $188 million in 2011. The cuts raise the possibility that the health system could eliminate 1,250 more jobs, on top of the 1,000 it announced late last month.
“If you consider most of our budget is people, $75 million equals about 1,250 (full-time equivalent jobs),” Foley said. “When you talk about a $75 million reduction, you’re talking jobs and services.”
But health system board members chafed at the idea that the system would be penalized for the roll back.
“Our position, number one, is that we already adjusted our 2010 budget. We did what we were asked to do by this county,” he said. The health system’s 2010 budget proposal features a 19 percent cut in county subsidies.
Health system leaders maintain they should retain money they secure, including more than $200 million in federal dollars they got this year. But the system didn’t see a dime of that money, which went back to the county.
But the health system represents 42 percent of county appropriations. Cook County Board President Todd Stroger has repeated that a sales tax roll back of any kind would have dire consequences on vital services, including in the health system.
His opponents have disputed that, but today board members agreed with Stroger.
Health system chairman Warren Batts told commissioners earlier this month that the health system would begin 2010 with a $90 million budget gap. It’s benefited this year from one-time federal payments totaling $210 million.
In 2011, the health system stands to lose about $40 million in federal stimulus dollars, in addition to the $75 million it would lose with the tax cut.
While the health system gets a substantial percentage of county appropriations, its approximate $300 million budget is 10 percent of the county’s budget.
“We need to prepare and start putting some things in place in 2010,” Foley said.
All this could have implications on today’s county budget hearings.
Health leaders bristled at the idea that the county public defender’s office was trying to secure $1.5 million, which would come from the health system. Board members speculated that would lead to even more job cuts.
Chief Financial Officer Michael Ayers told health system board members that although the system has improved its revenue growth and payments from patients, it is not benefiting the system’s bottom line.