The Cook County Board rescinded Tuesday the $4 million it approved on July 10 to address the Social Security application backlog at Stroger Hospital.

The proposed contract was sent back to the finance committee for review after board commissioners said they were worried that it looked like the County health services bureau was favoring contractors.

The health services bureau was also scolded for operating on a $15 million deficit after reporting a $35 million loss in the last budget year.

The bureau's director told the board he was out of ideas.

“I don’t know where else to trim,” said Robert Simon, director of the health services bureau. Simon said the deficit can only be made up by closing health centers or getting additional money from the state.

But the state’s budget crisis -- and a $46 million cost of living allowance for county prosecutors that the board approved Tuesday -- hint that a tax increase may be on its way to Cook County homes.

The allowance is being paid for by one-time surpluses in several county programs, but Commissioner Joseph Moreno (D-Chicago) said additional revenue would be needed to maintain the increased salaries.

He urged the board to consider increasing taxes in the 2008 budget, which will be voted on this fall.

“We slashed the hell out of the budget last time,” he said, insisting there is no excess left to trim.

But Commissioner Peter Silvestri (R-Chicago) urged the board not to “pick [taxpayers’] pockets one more time.”

Another commissioner, Earlean Collins (D-Chicago), said the county can cut costs instead by doing away with the contracting system at Stroger Hospital.

“Too much money is going out to these groups,” she said.

She proposed training county employees to file the appropriate collections paperwork instead of subcontracting the work. “This is just another way for people to make money off contracts.”

The health services bureau had proposed subcontracting to Chamberlin Edmonds at a higher commission rate than some of the other bidders on the work. John Cookingham, the health service bureau’s chief financial officer, said the company had offered on-site services that the others had not, which made the higher commission worth the county's money.

But the other contractors were not asked if they would be willing to have on-site staff, prompting some board members to express concern about the bidding process.

“It’s important to compare apples to apples,” Commissioner Forrest Claypool (D-Chicago) said.

Four board members, including Commissioner John Daley (D-Chicago), voted to approve the contract, urging the board to avoid further straining the county’s health budget crisis.

Tom Glaser, the bureau’s chief operating officer, said the contract would help address the current revenue crisis by increasing Medicaid compensation for unpaid accounts. But he acknowledged that the additional money was “not anywhere near” the $50 million needed to address the operational deficit.

“No matter what we do we will always have patients who can’t pay,” Simon said, adding that there is a national health care crisis. He said Cook County has one of the better public health systems.