A year ago, as the U.S.’ coronavirus pandemic-spurred recession seemingly spared no local government, Cook County Board President Toni Preckwinkle warned “everything is on the table” when she laid out a $410 million budget gap for the 2021 fiscal year.
On Wednesday, Preckwinkle’s administration forecast much sunnier days ahead, projecting a $121 million budget deficit for next year that she said would be far easier to plug — and likely without requiring new levies, tax hikes, layoffs or fees.
Cook County Board President Toni Preckwinkle delivers her 2021 budget plan at the Cook County Building on Oct. 15, 2020. (Antonio Perez / Chicago Tribune)
“We’ve made a lot of difficult decisions and structural changes, frankly, that enabled us to weather a very difficult year in pretty good shape,” Preckwinkle said in a budget briefing with reporters.
The optimistic prediction is partly because of revenues climbing back up after more than a year of COVID-19 restrictions as well as an influx of federal funding under Democratic President Joe Biden. And because the end of the current fiscal year is expected to even lead to a budget surplus, the county will stand to recoup most of the rainy day funds used to plug this year’s $410 million deficit. It also will be in a strong position to hire new employees following layoffs and vacant job cuts for the 2021 fiscal year, Preckwinkle said.
The projected $121.4 million budget deficit for 2022 comes from a gap of about $60.3 million in the general fund, which consists of the criminal justice and administrative offices, and pension obligations, and another shortfall of $61.1 million from the health fund, which goes toward the county’s health care program and hospital system. Should projections hold steady, 2022 would see the second-smallest budget deficit under Preckwinkle’s tenure, after the 2019 fiscal year.
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Cook County Chief Financial Officer Ammar Rizki said it’s possible some of that deficit could be offset by tapping into the approximately $1 billion allocated to the county under Biden’s American Rescue Plan Act passed in March that, unlike the county’s $429 million federal CARES Act package last year, can be used to reimburse revenue loss. But Rizki said his team does not have an exact figure yet.
“We will always have issues that come out of nowhere for us when it comes to economic impacts, other issues that are not in our control,” Rizki said. “Having a very sound and steady approach, a disciplinary approach has helped us manage our fiscal health very, very judiciously.”
The general fund’s $60.3 million budget gap comes because of natural personnel expense increases such as salary raises, but it could have been worse without the state’s reopening triggering a rise in non-property tax revenues that was better than expected, though still not at pre-pandemic levels, county budget Director Annette Guzman said.
Guzman added that by the end of this fiscal year, there will be a $59.7 million surplus in the general fund stemming from those same revenues as well as reimbursements from the CARES Act, other federal aid, a strong housing market and slow hiring. That anticipated excess money will go toward shoring up the county’s rainy day fund, which was depleted by $77 million in this year’s budget, Guzman said.
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The health fund’s $61.1 million deficit partly stems from CountyCare, Cook County’s Medicaid managed care plan, ballooning in membership, which both adds revenues but drives up claims expenses. Also, because Medicaid redetermination, which is requiring people to reapply for eligibility, is expected to return to Illinois next year, CountyCare membership is projected to fall from 418,000 members at the end of the year to 390,000 in 2022, Cook County Health Chief Business Officer Andrea Gibson said.
Meanwhile, a $30.6 million health fund surplus for the end of this fiscal year is driven by higher patient fee revenues, more CountyCare patients seeking care at Cook County Health facilities and federal government reimbursements. Uncompensated care, which is medical care that goes unpaid, also has gone down over the past year.
Preckwinkle will reveal her 2022 budget proposal in October, with a final OK needed by the Board of Commissioners in mid-November. Her unanimously approved $6.9 billion budget for 2021 had slashed more than 500 vacant positions, dipped into reserves but did not hike up taxes.
County officials on Wednesday also said beyond patching up revenue loss, the $1 billion in American Rescue Plan funds will focus on community and economic development programs plus new hires that will include staff to manage those investments.
Preckwinkle didn’t elaborate on other departments that might see more employees, despite an ongoing labor dispute with two unions representing county employees, who have threatened to strike later this week.
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Rizki said the lens the county would use to dole out the $1 billion would heavily favor disinvested communities in order to follow Preckwinkle’s long-stated ethos of racial and socioeconomic justice.
“We just don’t have to go back to those old ways of doing things,” Rizki said. “We want to make sure we do them better.”
ayin@chicagotribune.com
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