Cook County Board President Toni Preckwinkle will propose “sweeping the cupboards bare” to close a projected $550 million budget gap for next year, she told reporters Wednesday.
Preckwinkle’s administration plans to use a series of stopgap measures to help cover operations in lieu of new or increased taxes or layoffs in 2027 to bridge the shortfall left by a mix of federal healthcare cuts, rising employee pay and benefits costs and an expensive legal defeat preventing the county from using transportation “lockbox” dollars on its public safety offices.
“This is a challenging year, next year’s going to be more challenging,” she said ahead of her formal budget introduction to the county board Thursday morning.
The county’s healthcare system, meanwhile, instituted its fourth year of belt-tightening in anticipation of major federal cuts to Medicaid. Cook County Health asked for an extra $40 million allocation for the county to make up for an increase in uninsured and underinsured patients seeking care with little ability to pay for it.
One-time fixes typically are frowned upon by fiscal watchdogs and credit-rating agencies. But Preckwinkle’s chief financial officer, Angela Manning-Hardimon, told reporters during a Wednesday briefing that she felt “comfortable” tapping various reserve accounts and using one-time revenues because the county will still have “healthy” emergency funding left over.
“Reserves are built for times just like this, I believe the strong history of the organization planning, that’s what reserves are typically designed for: your most difficult fiscal years,” Manning-Hardimon said.
Preckwinkle’s full budget pitch is $9.69 billion, a roughly four percent reduction from this year. Total county headcount would shrink by 25 “full-time equivalents,” to about 23,800, under her plan. The proposal must still go through the gantlet of the county board — and pleas from separately elected officials for more money — over the coming weeks.
Cook County’s budget is generally split up between the general fund and the health fund. The general fund covers everything from Preckwinkle’s office to the courts and property tax system, while the health fund covers the county’s safety-net clinics and hospitals as well as its Medicaid program, CountyCare.
The $221 million in general fund fixes include spending $88 million in earned interest racked up on the county’s $1 billion allocation from the federal pandemic-era American Rescue Plan Act. Preckwinkle’s administration barely spent any of that money in the first year and was relatively slow to spend it since, allowing that money to build up interest while parked in the bank. She also proposed partially draining $61.2 million from a special reserve fund that was set up to keep ARPA-funded projects going after this year’s federal spending deadline. About $45 million still would be left over to pay for programming in 2027 and 2028, budget officials said.
Another $18 million would come out of “pension stabilization” reserves to help pay for next year’s contribution to the county retirees’ fund. $54 million will be diverted from a reserve fund used to pay down long-term debts. The county made other smaller cuts to payroll, overtime and delaying some tech projects and “non-mandated” programming, budget director Kanako Ishida-Musselwhite said.
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The county took a major budget hit earlier this year when a Cook County Circuit Court judge found that the Preckwinkle administration improperly used hundreds of millions of dollars in transportation tax revenue on offices they argued enforced “the rules of the road.” For years, it spent tax revenues from gas, parking lots, garages and car purchases on the sheriff, state’s attorney, public defender and circuit court clerk’s offices.
Illinois Road and Transportation Builders Association successfully argued under the state constitution’s “lockbox” amendment that the county could only spend that money on infrastructure or transportation projects. County board members agreed to pull money from reserves to make up for the funding shift from the legal loss this year.
Preckwinkle’s team is appealing the judge’s decision and, in the meantime, is setting aside the roughly $250 million in transportation revenues it hopes to use on public safety offices again “until resolution of the litigation,” Preckwinkle’s special counsel Laura Lechowicz Felicione said Wednesday. “If we are not successful then we’ll have to look at how it is that we want to spend that money moving forward.”
On the federal front, Cook County’s safety-net clinics and hospital system — which make up $4.7 billion of the county’s overall budget — face a “perfect storm” of cuts and are asking for the county to chip in an additional $40 million to help break even.
Cuts to federal tax credits for some people getting insurance from the Affordable Care Act marketplace; the end of Medicaid coverage for refugees, asylum seekers and trafficking victims; and new Medicaid work requirements are expected to slash $138 million from patient revenue losses and add $100 million in extra charity care costs.
Cook County Health said it has cut down on using outside agency staffing, frozen job openings and cut down on outside contracts. Its overall headcount is flat at 7,761.