CHICAGO - The Cook County, Ill., Board of Commissioners last week approved a $2.09 billion fiscal 1993 budget that includes preliminary funding for a new county hospital slated to be financed by general obligation bonds.

The proposed hospital, expected to cost between $300 million and $500 million, would replace an aging facility on the west side of Chicago, according to Pam Smith, spokeswoman for Richard Phelan, the board president.

Smith said that Phelan hopes the county will issue bonds and begin construction in fiscal 1994. The project is expected to take five years.

Planning for the hospital will be funded by a $5 million appropriation in the new budget. Those plans will enable the county to apply for a state "certificate of need," which will allow construction to begin, Smith said.

Meanwhile, the budget for fiscal 1993, which begins Dec. 1, includes $35 million for anticipated debt service payments on $250 million of GO bonds that are expected to be issued next year.

Woods Bowman, the county's chief financial officer, has said that $200 million of the bonds would be issued as the third phase of the county's $958 million, four-year capital improvement program. The other $50 million of debt would be short-term bonds issued for equipment purchases.

Approved Thursday, the budget includes $10.8 million of additional costs that were not included in the original version Phelan unveiled in October. The extra moneys will be reserved for elected officials' expenses, Smith said.

The budget was balanced with the help of across-the-board cuts that offset lagging revenues and increases in spending for health care and criminal justice.

The cuts include a $30 million, or 2.5%. decrease in departmental budgets. Those budgets were cut further by 5%, or 71 million, so that each department will have extra funds at the end of the fiscal year, according to Smith.

Smith said the 5% cuts were needed to comply with rating agency requests that the funds be set aside to ensure the county's financial stability.

However, some board members questioned the legality of the 5% departmental budget cuts and requested that Jack O'Malley, the state's attorney for Cook County, issue an opinion, Smith said.

Nina Cadsawan, a spokeswoman for the state's attorney's office, said O'Malley initially was concerned that the 5% cut would make the county vulnerable to a lawsuit from taxpayers who could argue that the proceeds should be applied to property tax relief.

But an amendment to the budget that was approved by the board last week allayed O'Malley's concerns, Cadsawan said. The amendment specifies that the 5% departmental cuts will be deposited in the county's unreserved fund to support the county's credit rating and for unanticipated revenue shortfalls, she said.

In addition, the board voted to cancel an anticipated $50 million property tax abatement for 1992. Smith said the abatement was abandoned because Gov. Jim Edgar vetoed the state's collection of a use tax on big-ticket items purchased by Cook County residents in the Chicago metropolitan area. The use tax would have raised an estimated $50 million in annual revenues.

Phelan has said the abatement would be reinstated if the state legislature is successful in overriding Edgar's veto. The Illinois House overrode the veto last week, but the Senate is unlikely to follow suit, Smith said.

Harvey Zachem, assistant vice president of the Great Lakes region at Moody's Investors Service, said Friday that the rating agency has not completed its review of the county budget.

Steve Eaddy, an associate director at Standard & Poor's Corp., said the budget is "under review" at the rating agency. Officials at Fitch Investors Service did not return phone calls.

Moody's rates the county's debt A1, while Standard & Poor's and Fitch rate it A-plus.

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