Cook County Board President Toni Preckwinkle is set to unveil her $8.75 billion budget Thursday morning, free of any new taxes or fees. The announcement comes the same day that applications open for the county’s $42 million guaranteed income pilot — one of several federal COVID-19 relief-funded initiatives she’s announced over roughly the past year.
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Preckwinkle, a Democrat, is running for a fourth term leading the county board against Republican nominee Bob Fioretti and Libertarian Thea Tsatsos. “Through judicious financial management, we are working to create a better tomorrow that isn’t at the expense of today,” Preckwinkle said in a press release. “In the face of multiple economic risks, Cook County has had its bond rating upgraded, continued making supplemental pension payments to put the County’s pension fund on a path toward sustainability and built up a manageable reserve fund.”
This summer, the county forecasted the smallest gap of Preckwinkle’s tenure: $18.2 million, and said at the time they had no plans for tax or fee increases. Thanks to higher-than-forecasted revenue figures — including $124 million more than it was expecting from sales taxes — the county did not need to make cuts to fill that gap, and also eliminated its wheel tax, effective next June.
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The $8.75 billion figure is a 7.8% increase over this year’s budget. It’s nearly three times the size of Preckwinkle’s budget a decade ago. That growth, county officials said in a Wednesday afternoon briefing, has been driven by the expanding mandate of its flagship health system and steadily rising pension payments. The county’s budgeted workforce has grown by just over 3% in that time, but not all those positions are filled: of the more than 23,500 positions budgeted in 2022, 4,000 are vacant.
The county has budgeted $491 million for pensions in 2023. Of that, $291 million is a supplemental payment the county has made for several years to prop up the pension fund’s lagging funded ratio. If those extra payments continue, finance officials estimate the fund will have 100% of the money it needs to pay out benefits by 2043. Without those extra payments — made annually through an agreement between the county and the fund’s board — it’s slated to be insolvent by 2055. The county has also socked away $140 million in a stabilization fund that it can tap in less flush budget years.
“Absolutely we’re worried about a recession,” said Dean Constantinou, the county’s deputy chief financial officer, adding that the county was shoring up certain reserve funds as a bulwark against such a recession. “We anticipate that if there were a sector recession, it would cost the county about $100 million.”
Federal pandemic relief money continues to be a support pillar for the budget: Of the roughly $1 billion in American Rescue Plan Act money, the county allocated about $25 million in 2021 and $320 million in 2022, and plans to spend $270 million in 2023. The county estimates it will still have $300 million to spend between 2024 and 2026.
Among the planned spending of limited-time federal dollars: $75 million on violence prevention, a $12 million program to eliminate medical debt for qualified county residents, a $14 million program to expand homeless services for patients of Cook County Health, $10 million to remediate brownfields in suburban neighborhoods to spur development and a $20 million program with the Metropolitan Water Reclamation District of Greater Chicago for stormwater management.
Rescue plan money will also fund the county’s guaranteed income program, which aims to provide $500 monthly payouts to 3,250 residents for two years.
County officials are expecting the health fund to take a significant hit: It’s just unclear when. The state is expected to restart annual eligibility reviews for Medicaid — known as redetermination — in the coming months. County officials say they are unsure when it would happen, but are budgeting for it to happen Jan. 1.
That redetermination would likely result in thousands of current patients of Cook County Health’s Medicaid-backed insurance plan, CountyCare, losing their coverage, and the county losing out on reimbursements. That redetermination process could also send more uninsured patients to Cook County’s hospitals and clinics, driving up charity care costs.
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Budget officials expect CountyCare membership to drop from roughly 426,500 this coming December down to just under 366,000 by next November.
The formal introduction of Preckwinkle’s budget Thursday will be followed by weeks of hearings and negotiating with the county board.
