With a projected $550 million budget shortfall next year, Cook County officials said Wednesday that the county must start considering restructuring its finances as expenses continue to outpace revenues.
It would be the largest budget deficit in Cook County Board President Toni Preckwinkle’s 15-year tenure, but the current projected shortfall is a much smaller portion of the overall budget compared to the last time it was this large.
About half of Cook County’s annual budget is a general fund and the other half a healthcare fund. The general fund’s shortfall is forecast at about $336 million, while the healthcare fund’s projected shortfall is about $215 million, according to Cook County Bureau of Finance officials who presented Wednesday the county’s financial forecast through next year.
Cook County is expected to end the current fiscal year with a net surplus of about $240 million, with the general fund projected to finish with a $283 million surplus but the healthcare fund projected for a $43 million loss.
The county’s 2027 fiscal year begins Dec. 1.
“This is going to be a really tough budget year, but we begin it from a position of strength,” Preckwinkle said, noting the county has in recent years strengthened its reserves and pension funding, and has received increased bond ratings in the last four years.
“But even strong, internal fiscal management can’t shield us from external events — court decisions, federal policy changes and rising costs across the economy,” Preckwinkle said.
Federal funding cuts to Medicaid are expected to result in about a 16% decline in average monthly membership in Cook County’s Medicaid insurance plan, CountyCare, officials said. That equals about a $945 million drop in CountyCare revenue for 2027 compared to what the county had expected prior to the federal Medicaid cuts.
At the same time, healthcare expenses remain high, particularly agency and overtime costs as vacancy rates “remain higher than desired.” Pharmaceutical costs have also been on the rise, said Scott Spencer, acting Cook County Health chief financial officer.
Spencer said the county health department is reviewing government contracts, considering “non-labor reductions,” “overtime control,” and systemwide “cost discipline” to help fill the healthcare budget hole.
The continued growth of employee payroll and healthcare benefit expenses, along with what county officials describe as a “restricted use of transportation-related taxes,” are driving the county’s general fund shortfall.
A Circuit Court judge ruled in January that Cook County misspent $243 million in transportation tax revenue in 2023, violating the state’s Safe Roads Amendment, which passed in 2016 and restricts local governments to spend transportation revenue only on transportation-related projects, like roads, bridges and transit. The restriction created a $258 million structural deficit in the county’s general fund, according to budget officials.
Budget forecasters recommended the county evaluate its budget priorities and consider a multi-year framework that “improves fiscal discipline and supports transparent decision making.”
Cook County Budget Director Kanako Ishida Musselwhite said county officials will first focus on cost-cutting measures to help fill the $550 million gap. Officials are also exploring opportunities to leverage the county’s existing assets to diversify and enhance its revenue base.
While avoiding any promise to not raise taxes, Preckwinkle said the county’s “goal is always to balance the budget without asking more from our taxpayers.”
“We’re going to look at a variety of belt-tightening measures. We always begin with looking at our existing expenditures and trying to figure out how we can be more efficient,” Preckwinkle said. “We’ve closed billions of dollars in gaps previously over the course of the last 15 years, and turn to revenue generation as the last resort. So, we’re going to be looking at cost savings and efficiency before we consider any new taxes.”
A virtual community feedback meeting about the county’s preliminary budget forecast is scheduled for 5:30 p.m. July 9.