CHICAGO -- For the second year in a row, Cook County, Ill., Board president Richard Phelan has proposed a budget that calls for no new debt and no property tax increases, despite ongoing plans to build a massive new county hospital.

The $2.2 billion budget proposed by the outgoing board president yesterday includes $7 million for the construction of a new juvenile corrections center, $24 million to complete the design and planning for the new Cook County Hospital, and $40 million to construct a new hospital for county inmates. It would also fund additional judges, prosecutors, and public defenders for new child abuse and juvenile delinquency courtrooms.

County Chief financial officer Woods Bowman said officials decided to allocate $46 million of the 1994 budget surplus to fund start-up costs for several projects. And they want to use $29 million of the surplus to pay for capital equipment that was originally charged against bond accounts in anticipation of future bond offerings, instead of issuing new debt.

"We wanted to give the new administration the opportunity to develop its own financing plan," Bowman said.

County Board president-elect John Stroger, in his campaign for the office, had suggested that surplus funds could be used for a property tax abatement. But speaking after the proposed budget was announced, he said that if existing juvenile detention facilities and county jails are as overcrowded and potentially dangerous as Phelan has asserted, it might be better to spend the money on new quarters for juveniles, criminals, and those awaiting trial.

Stroger is currently chairman of the board's Finance Committee, which will hold public hearings on the proposed budget and is vital to the plan's success.

He declined to comment on details of the budget, other than to say he was pleased it did not call for a tax increase. And he did not discuss his plans to finance the new Cook County Hospital, which Bowman said would "definitely be in the half a billion dollar range."

County officials last May released a report from consulting firm Bobrow/Thomas and Associates that said a new 464-bed facility would serve county needs. A county-financed feasibility study from Coopers & Lybrand released last November reported that the hospital could be financed with less than $560 million of bonds. They said the bonds would not require a property tax increase, partly because old bonds were being retired.

A spokeswoman for Stroger said he has already met with several advisers to discuss financing for the new hospital. "Cook County Hospital is a priority of his," said Andrea Brands. "It will be looked at as soon as he gets into office, but he doesn't want to commit to any details on the financing at this time."

Bowman said the outgoing administration decided not to broach hospital funding in the 1995 budget because it would take at least a year to finish planning the new building. The new administration, he said, "is going to have to live with the financing for a very long time, so it should be their own."

Cook County currently enjoys an A1 rating from Moody's Investors Service and an A-plus rating from both Fitch Investors Service Inc. and Standard & Poor' s Corp. Phelan said that as he leaves office he's particularly proud of the county's fiscal turnaround.

The proposed budget would hold the property tax levy for 1994 at $420 million, $3.1 million less than when Phelan took office four years ago. He noted that $130 million of tax anticipation notes were retired in April, and said that by the end of this month, all loans from working cash funds to the operating funds will have been repaid, "the first time in living memory the county will be free of these debts," he said.

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