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Preckwinkle unveils spending plan for $1 billion in federal relief
The 2022 budget comes without new taxes, layoffs or hiring freezes and is "determined" not to saddle taxpayers with more costs when federal funds run out.

Thursday, October 07, 2021
Crain's Chicago Business
by A.D. Quig

In a reversal of last year's layoffs, hiring freezes and tumbling revenues, Cook County Board President Toni Preckwinkle is proposing a good-news budget this morning, with the help of $1 billion in federal funding and a boom in online sales during the pandemic.

The $8 billion budget is a “balanced” proposal, county officials told reporters at a Wednesday briefing, with no new taxes, fines, fees or layoffs. In fact, the county’s headcount is growing by about 7%. The county is receiving roughly $1 billion in federal relief through the American Rescue Plan that's helping offset a drop in tax revenue.

Rather than spend down a vast majority of its ARP funding next fiscal year, Preckwinkle proposes breaking up that $1 billion equally over the next three years. $100 million will be used in 2022 for revenue losses and one-time costs like pandemic pay, the cost of managing ARP funding and capital projects the county would have normally borrowed for.

The rest—about $233 million—will go towards new or expanded programs. $80 million is budgeted for mental health programming, public health and food programs. Another $80 million will help fund a direct cash assistance program and a guaranteed income pilot; short- and long-term housing help and small business assistance. $60 million will help fund alternatives to 911 for mental health crises, housing for those recently released from prison and other “special population, and violence prevention programs for youth and young adults. Another $67 million will go to help other suburban communities navigating their own ARP funding, broadband expansion and environmental programs.

Most of the increase in headcount—from 21,877 this year to 23,467 proposed for next—is at the county’s health system. There’s a proposed 11% increase in full-time equivalent positions as Cook County Health ramps up its surgical capacity again. That's after the system cut the employee count and announced plans to close its Woodlawn and Near South outpatient clinics in 2020 in light of COVID's financial fallout—services in those clinics were shifted to Provident Hospital of Cook County. Grant-funded health positions are getting a proposed 39% boost next year, including to help contact tracing and vaccination outreach efforts.

 

“We have to be very careful about how we invest that money,” Preckwinkle told reporters in a Wednesday afternoon briefing. “We have 3 years to allocate the money, five years to spend it. We are determined we’ll make investments that do not burden taxpayers beyond the five year length of the program.”

CCH has been the main driver of the county budget’s ballooning size over the past decade. The bulk of the growth is related to CountyCare, the health system’s Medicaid managed care plan. It grew faster than expected in the COVID era: membership this December is projected to be more than 422,000. That number should shrink as the economy improves and when the state resumes the redetermination process, which reviews eligibility for the state’s nearly 3 million Medicaid beneficiaries. Those eligibility reviews were put on hold during the pandemic – keeping more individuals on the rolls. It’s unclear when it will start back up again.

One of the largest public health networks in the nation, Cook County Health covers Stroger and Provident hospitals, a network of clinics, CountyCare and medical services for detainees at the Cook County Department of Corrections, as well as the county's Department of Public Health.

Even the out-years are looking rosier. Five or six years ago, the county fretted about declining revenues, Chief Financial Officer Ammar Rizki said. Cigarette tax receipts, for example, dipped from about $200 million a decade ago to about $90 million in recent years. But the ability to collect sales tax on online purchases “leveled the playing field with brick and mortar businesses.”

Without online sales tax revenues, the county’s costs were projected to outpace revenues by $261 million by 2026.

The county’s pension fund is similarly on more solid footing: Its funded ratio is 63.9%, thanks to annual extra payments the county started making in 2017—funded by that penny-on-the-dollar sales tax hike. Without those extra contributions, the funded ratio would have been 53.3% “at most,” county officials said. They are on track to be fully funded by 2046. Next year, Preckwinkle is proposing an additional $325 million pension payment, and dedicating up to $20 million for the fund’s reserves.

After Preckwinkle introduces her proposal today, the board of commissioners will vet it at hearings with department heads in the coming weeks. A final vote is expected in November.



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