November 15, 2023
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EXECUTIVE SUMMARY
The Civic Federation supports the Cook County FY2024 Executive Budget Recommendation of $9.1 billion. It continues the Preckwinkle Administration’s track record of prudent financial management. The budget reflects the County’s ongoing post-pandemic recovery, with strong revenue projections in FY2024. The work the County has done over the past several years to conduct long-term fiscal planning and implement financial policies has put the budget in a strong financial position and enabled the County to build up a healthy general operating reserve.
Cook County also achieved a major legislative accomplishment this year through the passage of landmark pension funding legislation in State Public Act 103-0529. The legislation authorizes the County to make pension contributions based on the actuarial needs of the fund using a best-practice funding schedule with at 100% funding goal, allows contributions to be funded through any revenue source and resolves an issue with pensions for Tier 2 employees potentially falling out of compliance with federal Safe Harbor rules.
The FY2024 budget proposal represents an increase in spending of $356.8 million, or 4.1%, from the FY2023 adopted budget of $8.8 billion. While the budget cuts 414 vacant personnel positions, expenditures are increasing due in large part to salary increases driven by collective bargaining agreements. The budget includes no increases to taxes or fees.
The Civic Federation commends the County on several aspects of the budget proposal, including the planned use of excess reserves, long-term financial planning and forecasting efforts, plans to evaluate and dedicate funding to sustaining ARPA-funded programs, and transit planning efforts as a key stakeholder in the future of the Chicago region’s public transit system. The County plans to use some of its excess operating reserves to set aside an ARPA sustainability reserve fund to support programs created with the $1 billion in American Rescue Plan Act funding the County received.
There are, however, some fiscal pressures on the County’s budget. The shifting of transportation tax revenues away from the General Fund into a separate Transportation Fund in order to comply with a 2016 Illinois constitutional amendment (the Transportation Lockbox, or Safe Roads Amendment) makes the General Fund more reliant on sales tax and other economically sensitive revenues. The County also has lingering staffing shortages, especially within the Cook County Health and Hospitals System, which are driving up contractual labor costs.
The Civic Federation calls on the Cook County Board of Commissioners and President’s Office to consider two longstanding recommendations to address unincorporated areas and to create a unified property tax administration office. The Federation also recommends that Cook County Health include the full subsidy provided by the County to the health system through pension contributions and debt service, as well as past year expenditures, in the CCH annual proposed budget.
The Civic Federation presents the following key findings from the Cook County FY2024 proposed budget:
- Appropriations: The County’s Executive Budget Recommendation proposes total spending of $9.1 billion in FY2024, which represents an increase of $356.8 million, or 4.1%, from the FY2023 adopted budget of $8.8 billion.
- General Fund appropriations, which account for public safety and administrative County functions, are proposed to be nearly $2.1 billion, an increase of 6.2% from the prior year budget, due to rising personnel expenses.
- Cook County Health appropriations of nearly $4.3 billion represent an increase of $264.3 million or 6.6%, from the FY2023 adopted budget. The increase reflects both growth in salaries tied to collective bargaining agreements and an increase in spending on contractual labor to help compensate for staffing shortages.
- Property Tax Levy: Cook County proposes a total property tax levy of $803.8 million in FY2024, which is an increase of $20.7 million, or 2.6%, from FY2023. The County will continue to hold its base property tax level flat at $720.5 million as it has done since 2001, but will generate an additional $95.1 million from expiring TIF districts, new property and expiring incentives. The County will provide a property tax allocation of $157 million to Cook County Health, which is an increase of $10 million from the prior year.
- Personnel: The County proposes a total of 23,346 full-time equivalent (FTE) positions across all funds, which is a net decrease of 414.3 FTEs, or 1.7%, from the adopted FY2023 budget. All positions eliminated in FY2024 are vacant positions.
- Pension Fund: The proposed budget includes a total pension fund contribution of $538.9 million in FY2024. This includes a statutorily required contribution of $205.2 million and a supplemental contribution of $333.7 million. Fiscal Year 2024 is the last year where the County will make a supplemental pension contribution via intergovernmental agreement as the supplemental contributions were recently codified into state law through Public Act 103-0529.
- Fund Balance: The County had $1.2 billion in unrestricted general operating reserves at the end of fiscal year 2022. This is well above the target set through the County’s fund balance policy. Therefore, the FY2024 budget will allocate $301.7 million in excess unassigned fund balance toward one-time uses, including approximately $166 million to establish an ARPA sustainability reserve for the continuation of some programs initiated in response to the COVID-19 pandemic.
- Debt: Cook County’s debt service appropriations of approximately $260 million make up less than 3% of total expenditures, which signifies a low bonded debt burden.
The Civic Federation supports the following elements of the Cook County FY2024 proposed budget and the County’s financial position:
- Cook County pension reform legislation;
- Prudent financial management;
- Appropriate use of excess reserves;
- Planning and evaluation for sustainability of ARPA programs;
- No increases in general taxes or fees;
- Independent Revenue Forecasting Commission’s continues to refine projections; and
- Cook County’s involvement in transit planning.
The Civic Federation has concerns about the following issues:
- Staffing shortages and high cost of contractual labor within Cook County Health;
- Transportation tax revenue constraints;
- Unincorporated area funding subsidy; and
- Property tax bill delays.
The Civic Federation offers the following recommendations to Cook County:
- Create a unified property tax administration office;
- Convene stakeholders to address unincorporated areas; and
- Include the full cost of the County subsidy to Cook County Health in the CCH proposed budget.
Click here to read the full report.
Click here to read the press release for this analysis.