Local, Park Forest, Regional News

Preliminary Budget Forecast for Cook County FY2024 Shows Lower “Gap” than Previous Years

Cook County, IL-(ENEWSPF)- The Cook County budget will likely still not be balanced in the 2024 fiscal year, but the budget gap will be smaller than before. So says Cook County President Toni Preckwinkle in a statement released this week.

Cook County Board President Toni Preckwinkle today unveiled the preliminary forecast for the County’s Fiscal Year 2024 showing a projected gap of $85.6 million which is down significantly from the height of the pandemic and its $409.6 million gap. The $3 million projected hospital system gap represents the lowest of President Preckwinkle’s administration.

In the face of multiple economic risks and budgeting challenges, Cook County has seen its bond rating upgraded, successfully pushed for legislation to fully fund pensions in 30 years, built up its reserve funds and developed hundreds of millions of dollars in equity programs and pandemic relief. This has all been accomplished while putting forward balanced budgets with no increases to existing taxes.

The preliminary forecast report presents a mid-year projection of year-end revenues and expenses for FY2023. The report also presents an initial forecast for FY2024 revenues and expenses for the General Fund and Health Enterprise Fund, the County’s two major operating funds.

“Years of hard work have put us in a strong fiscal position. This is one of the smaller gaps of my administration and we are proud of what we have done to create this sturdy financial foundation. We have done this while shoring up Cook County’s pension, expanding equity, managing pandemic relief and navigating the ever-changing national economic climate,” President Preckwinkle said.

Preckwinkle noted the County remains on solid financial footing while also making major investments in small business assistance, emergency rental programs, violence prevention, environmental improvements, infrastructure upgrades, economic development and digital equity in FY2024.

Federal Pandemic Relief, Equity Fund and Pension Reform

Cook County directly received over $1 billion from the federal government through the American Rescue Plan Act (ARPA) and has coordinated an extensive process to develop a responsible, comprehensive and equitable spending plan. Over the next three-to-five years, the County will be investing $700 million, roughly 70% of the federal funds received, in community programs for County residents and businesses.

By prioritizing equity throughout the budgeting process, Cook County is strategically investing in communities using a holistic approach to support both immediate recovery needs and long-term transformative initiatives. This includes the nation’s largest publicly funded guaranteed income initiative, millions of dollars for economic development and small business grant programs as well as housing assistance, utility bill assistance and its program to abolish up to $1 billion medical debt. Hundreds of millions of dollars in additional funding will be going to healthcare and health access initiatives, justice initiatives, violence prevention programs, infrastructure improvements and environmental projects.

The County is also addressing disparities and disinvestments through the Cook County Equity Fund. The Fund is enabling important work in the justice system, public safety, health, housing, economic opportunity, community development and social services to benefit historically marginalized communities. With this work, the Equity Fund has the potential to transform communities through direct reinvestment and allocation of resources.  The County is committed to building on progress to date in Fiscal Year 2024.

Preckwinkle added that Cook County has paid over $2.3 billion above the state’s statutory payment formula. The Pension Fund’s funded ratio is expected to increase to over 70% since implementing this additional pension payment. This commitment to increased payments, even throughout the pandemic, has the County’s pension fund on track to reach 100% funding by 2047. Recently, the County spearheaded fiscally responsible and sustainable pension reform legislation approved by the General Assembly to ensure the County can fully fund its pension obligations. The County has been making larger pension fund contributions than state law requires over the last seven years through an intergovernmental agreement (IGA) and wanted to make this temporary fix permanent.

Overview of FY2023 Year-End and FY2024 Preliminary Forecast

For the FY2023 year-end, the County projects positive net results of $214.7 million in the General Fund. This surplus can in part be attributed to the inflationary impact on sales tax receipts. Other contributing factors include increases in one-time revenues collected by the State of Illinois and distributed to local governments, and the continued national trend of longer hiring timeframes increasing payroll savings.

In FY2024, the County is forecasting a budget shortfall of $82.6 million in the General Fund with revenues forecasted to be $41.2 million below the FY2023 adopted budget. Despite an anticipated increase in sales tax revenue, the County is expecting a reduction of Personal Property Replacement Tax disbursements from the state. Expenses in the General Fund are forecasted to be $41.4 million above the FY2023 adopted budget due to expected increases in personnel costs, the inflationary impact on the cost for goods and services procured by the County and a $22 million increase in the County’s supplemental pension payment to the Pension Fund.

The County’s hospital system expects positive net results of $402.1 million for the FY2023 year-end driven by several factors including the continued suspension of redeterminations and favorable auto-enrollment percentages through year end, payroll savings due to a tight labor market, and higher than anticipated Medicaid Directed Payments from Managed Care organizations. For FY2024, the County’s health system forecasts a record-low budget shortfall of $3 million driven by expected labor cost increases, lower CountyCare membership, and increased costs associated with care for asylum seekers.

“The encouraging state of our finances is because of our willingness to make hard decisions and combat tough problems head on,” Preckwinkle said. “We will continue this commitment to fiscal responsibility as we work with stakeholders on our budget in the coming months.”

A virtual public hearing on the preliminary forecast will take place at 6 p.m. on July 11. Residents will have an opportunity to provide testimony and engage directly with the President’s office on their budget priorities. The President’s office will livestream the public hearing and residents can use social media to ask questions.

Residents can now visit the County’s website at cookcountyil.gov/Budget to view the preliminary forecast. Residents will also be able to submit budget questions at submit-budget-questions.

This is news reported by Cook County government and written by the same.