Cook County Board President Toni Preckwinkle painted a picture Thursday of a perfect storm striking county finances, with nastier weather ahead, while proposing a 2027 budget that will avoid tax increases but lean heavily on one-time fixes to plug a $550 million gap.
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.
While she said 2027 will be “a challenging year,” both Preckwinkle and county commissioners anticipate 2028’s budget pressures will be even worse.
Likening the budget to a house her team had painstakingly renovated over the last decade while paying down its mortgage, Preckwinkle in her budget address to the County Board said a storm had hit: the transportation lawsuit was a tree falling through the roof, while “cruel, cruel” federal funding cuts were like a basement flood.
“Water is coming in from above and below. It doesn’t matter what caused the problem. It’s up to you to fix it, and that’s what we’re dealing with,” she said. “When a storm hits, you don’t take out a second mortgage if you can help it. You cut back on expenses, you make tough choices, you find a way to pay for it all. That’s exactly the approach we’re taking with this budget, tightening our belts across county government so that we’re not asking our residents for a single additional dollar this year.”
That no-tax-hike line won Preckwinkle an election year ovation from commissioners. She and the 17 seats on the County Board are on November ballots. Preckwinkle faces libertarian Michael Murphy.
Though few have serious challengers, most commissioners were upbeat about the prospect of again neither being asked to vote for a tax increase that could enrage voters already seeing higher gas and grocery prices nor layoffs for county workers, which could risk alienating public sector unions.
The county’s healthcare system, meanwhile, instituted its fourth year of budget trims 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 4% reduction from this year. Total county head count 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 includes 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 while it gathered public feedback on its plans, 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 2028 and beyond, 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. And $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.
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.
The 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.”
In an emailed statement, John Fitzgerald, the attorney representing the transportation association, said the judgment “is the result of the County’s failure to honor a constitutional amendment that the voters approved in a landslide,” a reference to the lockbox amendment
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voters approved in 2016. “The County was repeatedly warned about its unconstitutional practices. It should have foreseen the consequences of its actions long ago.”In spite of that funding freeze, Preckwinkle proposed spending $150 million more than this year on its public safety offices.
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 head count is flat at 7,761.
Commissioner Bill Lowry, vice chair of the county’s finance committee and a member of the Cook County Health Board, said he was heartened by the cost-cutting measures, but said “it could be dark days,” going forward, “and that’s why I’m looking very forward to seeing what happens with the midterms.”
Lowry and other CCH board members are hopeful of a reversal of some of President Donald Trump’s Medicaid cuts if Democrats edge out Republicans in the November election. Preckwinkle warned without it, those long-avoided tax hikes could be coming.
“If federal changes to health care coverage stay the current course, the cost of maintaining our safety net will continue to rise. That means we cannot pretend that this year’s approach will be enough forever,” she said.
“In the years ahead, we will need to consider additional revenue to preserve the healthcare safety net, public safety, and other essential services our residents defend on. I believe residents deserve to hear from us now, not after the storm hits.”