What Scares Toni Preckwinkle About Next Year’s Cook County Budget
Updated: 1:54 p.m., 10/10/19
Cook County Board President Toni Preckwinkle outlined her $6.2 billion balanced 2020 budget on Thursday to a packed downtown Chicago board room – a spending plan she said includes no new taxes, tax hikes or layoffs.
Her message: The budget reflects hard work and long-term solutions, not one-time quick fixes. As a result, the county can sink money into resources according to need.
“Because every dollar we save, we can reinvest where it counts, where it belongs, with our residents and communities,” Preckwinkle told the 17-member county board and standing-room-only crowd.
The county would prioritize boosting equity – especially racial equity – in health care, criminal justice, transit, and jobs in southern Cook County. This would involve expanding services at the county’s public hospital system, Cook County Health, such as replacing Provident Hospital on the South Side with a new, modern building.
By keeping many defendants out of the county jail before their trials, the government would use money it would have spent on taking care of detainees instead on communities to reduce violence, and to prevent people from cycling in and out of the county jail. The county plans to demolish two more divisions at the jail, too, Preckwinkle said.
And there are plans to bring more jobs to Cook County’s south suburbs. The county would provide nearly $11 million in grants to accelerate housing rehab and spur economic development, among other needs.
“In recent years, parts of the south suburbs have struggled as they have become increasingly disconnected from the region,” Preckwinkle said.
Southern Cook County residents also might get reduced fares on public transit to boost access to transportation.
Commissioners do not plan to vote on the budget until November, but some are eagerly awaiting more details to better understand how the county would spend money in 2020.
Sean Morrison, a Republican commissioner from Palos Park, said he was concerned that the county is increasing its budget yet again, even if it is balanced.
“What I like to say is instead of expanding the budget by way of adding in more jobs and more services, how about we take that extra several hundred million dollars in revenue that came in above the projected taxes and use that to pay down more legacy debt,” Morrison said.
Preckwinkle’s budget blueprint should have been good news, especially since she had just a $19 million budget gap to close - a miniscule deficit compared to recent years.
But there’s more to it.
Preckwinkle, a Democrat, told reporters Wednesday during a budget briefing that what scares her the most is a problem that just keeps growing at the county-run health system: the amount of medical care Cook County Health provides without getting paid for it.
It’s known as uncompensated care, and it’s set to hit nearly $600 million next year.
“The principle challenge that we face is around uncompensated care,” Preckwinkle said. “Believe me. That’s something that I’ve talked to our health care managers about and intend to talk to the board about. What is their strategy for addressing this significant challenge?”
As for solutions? To be determined, she said.
For now, the county plans to give the health system an extra $10 million in its annual subsidy next year, for a total of $112 million. The subsidy typically just helps Cook County Health fund the county’s public health department and medical services at county correctional facilities. The increase reverses years of shrinking subsidies to Cook County Health, which didn’t need as much financial help because its Medicaid health insurance plan helped generate money.
In a statement Wednesday afternoon, Cook County Health spokeswoman Caryn Stancik said the health system has been “sounding the alarms” about the rise in uncompensated care, particularly charity care, for the last few years.
“We will work with the President’s Office and her team to develop both short- and long-term strategies, but we may be at a point where we need to limit charity care based on available resources,” Stancik wrote.
Charity care is free treatment that doctors provide to people who are typically uninsured. It’s just one piece of uncompensated care. The other is debt that accrues from insured patients who can’t afford their bills, and from insurance companies that won’t reimburse the health system.
Cook County Health’s swelling uncompensated care is partly fueled by other public and private hospitals throughout Cook County that won’t treat more patients for free, a WBEZ analysis of state records has found. Collectively, other hospitals in recent years have provided less charity care, while the county health system’s two hospitals combined have shouldered far more, records show.
For example, in 2017, Cook County Health’s flagship John H. Stroger Jr. Hospital on the Near West Side provided $281 million in charity care — 51 percent of all the charity care provided by hospitals in Cook County that year, the most recent state records show.
Health system drives bleak long-term budget outlook
Preckwinkle’s speech Thursday was her final pitch after months of negotiating with elected and appointed county leaders who run the public jail, courts, health system and more to find new revenue and cut costs.
The health system and public safety combined make up about two-thirds of the total budget. County Board commissioners must approve the budget before the fiscal year begins on Dec. 1.
Preckwinkle kicked off budget season in June when she first unveiled her preliminary financial roadmap for the county. At the time, she said she planned to start the 2020 budget year with a small deficit of around $19 million. It would be the smallest gap since at least 2011, when it was $487 million.
On Wednesday, Preckwinkle’s financial experts detailed how they plan to close the $19 million gap.
Among the efforts, there will be a net loss of 401 jobs by not filling vacant ones. The county ended up saving about $9.4 million on health insurance costs for employees because one of the plans workers sign up for is getting cheaper. And the county received a $23 million infusion from the state to cover salaries for probationary staff for Chief Judge Timothy Evans, who runs the county courts.
The health system closed its portion of the gap in part by eliminating 638 vacant positions, which saved $53.2 million.
Ammar Rizki, county chief financial officer, emphasized that patient care at the health system wouldn’t suffer because those jobs were never filled in the first place.
While some parts of Cook County government are cutting jobs, there would be 265 new ones in various departments.
The Cook County Assessor’s office and the Board of Review would both get more employees to help with the increasing number of property tax appeals from homeowners and businesses. The Cook County State’s Attorney’s Office and the Clerk of the Circuit Court would each get more workers to help with expungement cases to clear potentially thousands of marijuana convictions.
On Thursday after Preckwinkle’s budget speech, veteran county commissioner and Finance Committee Chair John Daley, a Democrat from Chicago, said the various elected officials “are going to have to justify them and say why they need them.”
While the 2020 budget is in the black, the long-term financial picture is bleak.
The county expects to lose money each year at least through 2024. That year, the deficit is estimated to hit around $308 million. Almost two-thirds of that is attributed to the health system.
On Wednesday, Rizki said the health system’s Medicaid plan, CountyCare, “was supposed to put the health fund on a path of fiscal sustainability.” But now because the health system is providing so much medical care without reimbursement, that’s contributing to the expected massive losses.
The trouble with taxes
The county also needs new ways to make money. Several taxes or fees don’t generate as much money as they used to. A tax on cigarettes, for example, used to bring in about $200 million a year a decade ago. Now, it’s projected to bring in around $100 million.
“But even bigger, failing to keep pace with inflation, our biggest one is our property tax levy,” Rizki said.
The county hasn’t increased its property tax levy in about 25 years. And there doesn’t seem to be an appetite to increase it any time soon.
“I’m not going to predict how we’re going to deal with potential problems,” Preckwinkle said. “We’re focused on the budget for 2020.”
The county also can’t count on as much money flowing in from some new taxes. Money from a tax on recreational cannabis, for one, won’t come in until 2021.
While Cook County government won’t be asking residents for more money next year, those who live in Chicago are bracing for financial pain. Chicago Mayor Lori Lightfoot is trying to close a far greater gap than Preckwinkle -- $838 million.
A series of public hearings on Preckwinkle’s proposed 2020 county budget are scheduled for late October and early November.
Elected and appointed officials who run the health system, jail, courts and more are scheduled to tell commissioners later this month how the proposed budget would impact their offices.
The County Board typically votes on the final budget in November.
Kristen Schorsch covers Cook County politics for WBEZ. Follow her @kschorsch.