November 15, 2018
The Cook County Board of Commissioners on October 17, 2018 approved an ordinance establishing an Independent Revenue Forecasting Commission.[1] The Commission is intended to help the Board of Commissioners make informed budgetary decisions by providing an annual estimate of available revenues anticipated over a period of several years.
Cook County Commissioner Chuy Garcia introduced the first version of the ordinance to create a Consensus Revenue Forecasting Commission in February 2018. The original ordinance proposed creating a seven-member Commission consisting of the chairs of three Cook County Board committees, the County’s Chief Financial Officer, a Federal Reserve Bank economist, an academic economist and a member of the public. The Commission would have produced a consensus forecast of various revenues. After several rounds of amendments, the initiative passed with all 17 County Commissioners added as co-sponsors of the ordinance.
The final ordinance modified the size and scope of the Independent Revenue Forecasting Commission. Rather than seven members, the Commission will consist of three members: two economists associated with universities in Cook County and one member of the public with expertise in public finance. Members will be appointed by the County Board President and confirmed by the County Board. The County’s Chief Financial Officer (CFO) will serve as chairman of the Commission. Rather than creating its own consensus forecast, the Commission will work directly with the CFO on an annual revenue forecast. The CFO will present a revenue forecast to the Commission along with the data, methodology and underlying assumptions used to create the forecast, and the Commission will analyze the forecast and assumptions and provide recommendations to the Board of Commissioners at an annual public hearing. All meetings of the Commission will be open to the public and subject to the Open Meetings Act.
The ordinance goes into effect April 1, 2019, and per the ordinance the CFO will be required to present the revenue forecast and methodology to the Commission by July 1. The public hearing will be held in August. If the Commission does not reach consensus on the CFO’s revenue forecast by August 1, the Commission must issue a report to the Board of Commissioners by August 31 explaining why an agreement could not be reached.
The Civic Federation commends the sponsor, Commissioner Garcia, for working to establish the Independent Revenue Forecasting Commission as a first step to greater understanding of the County’s finances and better collaboration between the Board and the President’s Office. We are pleased to see that this initiative creates an opportunity for more financial data and information to be provided to Board members in a public forum. The Commission should be a valuable asset to the County Board and President, as well as the public.
However, revenues cannot be analyzed in a vacuum. To comprehensively examine any government’s budget, both revenues and expenditures must be part of the equation. The County’s FY2019 budget projected a deficit of $49.4 million in FY2020, increasing annually to $246.6 million in FY2023. The deficits are due to rising expenditures while many revenue sources are flat or declining. The County’s expenditures are driven largely by personnel costs for employee salaries tied to collective bargaining agreements, as well as the rising cost of healthcare benefits. Therefore, it is critical that the County Board look for ways to control or decrease expenditures.
The Civic Federation recommends that the County Board expand the scope of the Independent Revenue Forecasting Commission to examine an expenditure forecast along with the revenue forecast and identify potential solutions to limit the County’s annual spending increases.
Related Links:
Civic Federation Analysis of the Cook County FY2019 Executive Budget Recommendation
[1] Cook County Ordinance 18-2073, Second Proposed Substitute. The ordinance amends the Cook County Code, Chapter 2, Article III, Sections 2-84 to 2-85.