Category: Taxes

Departmental Budget Hearings Underway on $5.9Billion Cook County Budget

10/27/2018

Cook County Board of Commissioners Finance Committee - Departmental Budget Hearings
October 22, 2018

Bureau of Finance - Budget Overview
Office of the President
Office of the Independent Inspector General

Commissioners present at least most of the time: Moody, Daley, Schneider, Suffredin, Boykin, Deer, Arroyo, Moore, Fritchey, Gainer.

Overview of the Budget - Ammar Rizki, CFO, and Tanya Anthony, Budget Director:

Budget is at $5.9 Billion and the $81.2 million deficit was closed by “structural changes.” There is a 3% increase in the operating budget with a 32% increase in Cook County Health (CCH) due to increased enrollment in County Care. About $500 million in uncompensated care accounts for much of this increase. CCH receives a $102 million subsidy from the County. A .3% increase in FTE positions is mostly in Health area (CCH)—about 246 employees. CCH anticipates balanced budgets for the next 3 years.
An increase in sales tax revenues is anticipated ($52 million more than 2018) due to the good economy. The prediction is for a mild recession in 2020. Cigarette, Clerk of the Court Office, Treasurer, and Sheriff revenue is down. Supplemental funding toward pensions for County workers in the past few years has saved this liability. The plan is to achieve 100% funding by 2047 if the county stays on track in making more supplemental payments.
Comm. Suffredin asked the Budget Dept. to consider charging municipalities a percentage for collecting their property taxes. This would be a big hit for municipalities. He also mentioned that the property tax levy for the County has stayed the same for many years. He seems to suggest that these two areas are possible revenue sources in the future.
Comm. Boykin noted there are currently 725 vacant positions in the general fund plus the vacancies in CCH. He asked about property tax rebates for poor homeowners and tax holidays. Comm. Schneider asked whether positions vacant for 12 months or more are really needed.
There is a new Policy Road Map which encompasses the following categories:

Criminal Justice
Health
Economic Vitality
Environmental Justice
Public Infrastructure and Assets
Operational Stewardship (efficiency and cost effectiveness)

Comm. Daley several times reminded the other Commissioners to submit questions in writing that are not answered at the meeting. The answers will then be posted on the website.

Office of the President - Lanetta Hayes Turner, Chief of Staff:

This office encompasses only 5% of the County’s budget. FTEs have increased by 24 since last year.
The county has reduced debt by 11% since 2011; and reduced land holdings by sale, lease or demolition.
In technology, the ERP (operations) and BUS (criminal justice) systems are well under way and being used by many departments. This observer could not get exact numbers on this. Key performance indicators are being stressed, so it appears that some form of performance management is being used.
In the area of improved services, the county is formally checking its 5,000 rental units and mentoring minority and women businesses to be able to get county contracts.
Comm. Fritchey questioned the need for new positions in the President’s office and increases in personnel services, Veterans departments.
Animal Control was a topic commented on by several commissioners—high kill rates, surplus budget of $7 million, opening new shelters, and doing more in this office for animals and their owners.

Office of the Independent Inspector General - Pat Blanchard, Independent Inspector General (IIG):

This office has investigated corruption, waste, misconduct, monitoring contracts, etc. The office received 394 complaints and issued 50 reports just this year covering tax evasion, improvements in Cook County Health and Hospitals System (CCHHS) billing, political hiring and firing, etc. with many recommendations.
The budget is about $2,200,000 with 16 FTEs. The budget has been cut a lot over the past years.
The cost savings for the County is very high because of this office’s work.
Discussion centered around the possibility of the IIG entering into an Intergovernmental Agreement with the Metropolitan Water Reclamation District (MWRD) for his services. A draft agreement has been written which would cover 2-3 years as an intergovernmental agreement if approved by the Boards of both entities. Two employees plus hourly charges would be charged to MWRD. Some commissioners looked to this agreement as a template for other municipalities and governments to subcontract IIG services and guidance.
Comm. Suffredin expressed concern about the confidentiality of the IIG reports and has submitted an ordinance penalizing those who leak the confidential information contained in the reports..

Observer - Karin Hribar

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Cook County Treasurer Demonstrates Value of Technology and Offers to Show Others

11/2/2017

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Cook County Board of Commissioners Finance Committee - Departmental Budget Hearings
October 30, 2017 (afternoon sessions that started at 1 pm)

Recorder of Deeds
Treasurer
Commissioners absent for all or most of the meetings: Arroyo, Butler, Fritchey (watching from home), Goslin, Moody
Commissioners present: Boykin, Daley, Deer, Gainer, Garcia, Moore (arrived 1:50), Morrison, Schneider, Silvestri, Sims, Suffredin (arrived 2:55), Tobolski (there for Treasurer)

Items of Interest:

Treasurer Maria Pappas provided the Commissioners with a BOOKLET full of information showing the value that has been realized by all the automation projects in her office since 1998 when she was first elected Treasurer:
- Improved services
- Fewer employees
- Reduced Costs
In addition, the booklet contains comparisons of 1998 to 2018 of
- Salaries of grades 11 thru 23 after the “cost of living adjustments (COLAs)” given by the County to employees. The increase has been 116%. P. 73.
- The list of the percentage COLAs actually given. P. 74
- The value of fringe benefits: $7,955 in 1998 and $22,198 in 2018, a 179% increase in the average cost. (The average salary in her department for 2018 is $67,000 in response to a question by Comm. Schneider.) The majority of the 2018 benefit costs are for medical (excluding dental) of $12, 526 and for pension of $7,578.
The Treasurer was making the point that salaries and benefits for Cook County employees have gone up tremendously over the years, which the County Board has approved through its votes. However, there was no information as to how employees in other governmental entities or in the private sector compare or how the COLAs compare to the increase in the Consumer Price Index.
- Comm. Morrison stated that his office has calculated an average COLA of 3% each year since 2000, while the growth in average household income for that period was 2.2%. His office calculates that if the County had held salary growth to the average nationwide, it would have saved the County $1.22 billion.
- Another point the Treasurer made was that by 2022, if salaries and benefits continue to rise as they have, her office, which currently provides the County more revenues than it costs, will no longer have such a surplus.
Treasurer Pappas also discussed the negatives to the County and property owners resulting from moving the sales of property for unpaid taxes (the “tax sale”) from 13 months after the taxes became past due to 9 months. The County loses $6 million each month, or $36 million per the Treasurer. The Treasurer highlighted how many of the tax sales are because of unpaid taxes of less than $1,000. The Treasurer has done a lot of outreach to notify property owners of the impending sale, and, in 2017 the number of tax sales was the lowest since the automation of the sale 10 years ago. Comm. Boykin is working on creating a loan program for these property owners who owe so little so they can avoid having their property sold.
Treasurer Pappas said that her office was going to start holding seminars every two weeks for other departments to learn how that office has utilized technology to achieve such positive results.

Both the Treasurer and the Recorder have more than met the request for a 10% cut (or equivalent through an increase in revenues).
Upon questioning by Comm. Boykin, Recorder Karen Yarbrough stated that she did not feel merging her human resources (4 employees) or information technology (5 employees) with those of the County would result in much of a savings.
Recorder Yarbrough said that she and Clerk Orr have thus far had only 1 meeting about the merger of the Recorder of Deeds and the County Clerk offices in 2020, but sees no reason why the merger should not be smooth, and she expects that most of it will in effect be done prior to the 2020 date. However, she questions whether the projected savings of $1 million/year will be realized.
As a result of a complaint prior to Recorder Yarbrough being elected in 2012, the office is under court oversight to come into compliance with the Shakman case, which prohibits either favoritism or penalties for political reasons. The Recorder said she hopes the office will be found in compliance, and out from under court oversight, in 2018.

Observer - Priscilla Mims

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Assessor and Board of Review State that Tax Bills May be Late if Cuts Made to their Budgets

10/31/2017

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Cook County Board of Commissioners Finance Committee - Departmental Budget Hearings
October 27, 2017

Assessor
Board of Review
Board of Commissioners

Commissioners absent for all or most of the meetings: Butler, Goslin, Moody (arrived 12:15), Moore. Fritchey was not in the room, but sent a message he was watching from home as he had a doctor’s appointment about a hip replacement.
Commissioners present: Arroyo, Boykin, Daley, Deer, Gainer, Garcia, Morrison, Silvestri, Sims, Suffredin, Tobolski

Items of Interest:

President Preckwinkle appointed the Civic Consulting Alliance this summer to review the assessment process after Chicago Tribune articles alleging a deeply flawed process which led to significant disparities that particularly hurt those in less affluent areas. More faulty assessments lead to more appeals.
Assessor Berrios said he had no idea when the review of the process would be completed. When asked if this would be prior to the March primary, he said that he could not tell the Alliance when it should complete the review. Apparently, he did not ask about the timetable in order to be prepared to answer the questions about the review. He did say he was fully cooperating with the review.
The League had sent Commissioners a list of information to be obtained from the Assessor and Board of Review, including number of appeals, number of appeals granted, reasons for successful appeals, and what steps are being taken to correct reasons for incorrect assessments. Chairman Daley said that he has asked the Assessor and Board of Review to provide this information, which should be posted on the County web site. The League will watch to see what is posted and when.
Assessor Joseph Berrios provided a response to reach the requested 10% cut to the proposed budget to help fill the $200 million hole resulting from the repeal of the sweetened beverage tax. The proposed cuts included eliminating 42 positions that are currently vacant. However, the Budget Director said that the projected savings would be less than half because the turnover adjustment (a reduction in the proposed budget to account for the fact that the positions would not be filled for the full budget year) would not be as great. The Assessor said that he would go back and propose further cuts to reach the 10%. The Board of Review (Commissioners Michael Cabornargi, Dan Patlak, and Larry Rogers, Jr.) did not provide any information as to where cuts could be made.
Both the Assessor and the Board of Review stated that making any cuts to their budgets would likely result in the 2nd installment property tax bills going out late. The estimated costs to all the local taxing bodies in Cook County is $5 to $6 million in interest for each month tax payments are delayed as a result of late bills since many of these taxing bodies would have to take out loans to keep functioning while they wait for the tax revenues. This did occur during the many years the tax bills were delayed until 6 years ago when all the elected officials involved with the tax bills came together and worked out a better process, aided by technology. The concern is particularly great for 2018 because that is the year all the properties within the City of Chicago are reassessed (approximately 882,000) and the expectation is that there will be far more appeals.
The number of appeals continues to grow. Many of the Commissioners expressed gratitude for all the outreach to the public both entities do, but this outreach undoubtedly leads to more appeals.
During the meeting on the Commissioners’ own budgets, Commissioner Suffredin said that they need to treat themselves as they treat other departments with regard to cuts.

Observer - Priscilla Mims

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Cook County Soda Tax Leads to Major Public Speaker Turnout at County Board Meeting

9/25/2017

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Cook County Board of Commissioners Meeting - September 13, 2017

Observations:

I arrived to observe the Board of Commissioner's meeting at 9:50am. Upon exiting the elevator, I was confronted with masses of people in the main hallway and was unable to enter the board room. Several groups had red or blue T-shirts, with the American Heart Association or Healthy Kids imprinted on them. There were over 90 names on the speaker list with each speaker limited to 3 minutes, or 4 1/2 hours of speakers - mostly to address the Cook County Soda Tax - as an ordinance for repeal of the soda tax was on the board agenda. (Agenda Item 17-4704)
The Soda Tax repeal bill was referred to the Finance Committee and will be discussed at a future meeting..

Observer - Laura Davis

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Cook County Board Approves New Procedure for Public Comment at Meetings

7/27/2017

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Cook County Board of Commissioners Meeting – July 19, 2017

Significant Decisions Made:

A proposal by Commissioner Garcia to prohibit law firms handling property assessment appeals from contributing to election funds for any candidate for Assessor was referred to the Finance Committee. (Agenda Item 17-4188)
Passage of the new witness slip ordinance - Authorization to speak will only be granted to individuals who have submitted in writing their name, address, subject matter, etc. 24 hours in advance of the meeting. (Agenda Item 17-3293) Commissioner Suffredin publicly thanked the League of Women Voters and the Better Government Association for their support of this amendment to the rules of organization.
After extensive discussion and testimony of twenty south suburban mayors and presidents, seeking repeal of a requirement that all contractors working on Class 8 projects have a certified U. S. Department of Labor Apprenticeship Program, the revised ordinance passed with a 9 to 6 vote. The communities promised to work with the Board to revise the issue. (Agenda Item 17-4339)
An amendment to the Cook County Property Tax Assessment Classes returning small Bed & Breakfasts with no more than six rooms to Class 212. Two years ago the Assessor’s office had changed their classification to Commercial which dramatically increased their property taxes. Testimony indicated that owners live in all of the affected B&Bs as their personal homes. (Agenda Item 17-3303)

Significant topics discussed:

The Comptroller and his staff reported on some of the finances of the County. Sales tax receipts are down about $5m from projections and not likely to be recouped. This was attributed to online sales. The Clerk of the Court receipts are down about $1.4m due to a decrease in the number of tickets issued.
Comm. Boykin questioned Dr. Shannon, Cook County Health and Hospitals CEO, about increased costs to Stroger Hospital because of all the murders and gun violence. This was followed by a discussion of how Dr. Shannon made the ten percent cuts to his budget as ordered by President Preckwinkle. He indicated he cut 3 physicians, 21 nurses, and also cut contract usage and other related actions. He indicated that he had vacancies in other areas of the hospital and most of the laid off staff would be able to find other positions. This led to a discussion of vacant, funded positions that he still can use, and Commissioner Boykin questioning if all vacant position in the county are eliminated and all hiring is frozen “is there a need for a layoff”. The discussion ended there.
There was also a discussion questioning if the Comptroller’s staff still has to drive to Springfield to pick up the multi-million dollar checks from the State. He answered Yes, but they are still trying to achieve electronic transfer and eliminate the driving.

Other observations:

The meeting lasted until 6:30 p.m. This observer left at four p.m. The actual Board Meeting with the pledge and prayer began about two thirty in the afternoon having been preceded by several committee meetings. It was a “survival of the fittest" meeting.

Observer - Syvia Tillman Meeting lasted: 9:30 a.m. until after 6:30 p.m.

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Is the Cook County Property Tax Assessment System Fair?

7/23/2017

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Cook County Board of Commissioners Finance Committee Hearing - July 18, 2017

Purpose: To discuss the alleged unfairness in the Cook County Property Tax Assessment System - an issue recently raised in a series of articles in the Chicago Tribune.

County Assessor Berrios and five senior professionals from his staff testified in front of the Cook County Board of Commissioners. Also supplying testimony were Christopher Berry from the University of Chicago, Robert Weissburg, and seven spokespersons representing various community groups from low income neighborhoods within the city of Chicago.

Assessor's Office Testimony:
Assessor Berrios and his staff testified regarding the methodology used to determine real estate assessments. The following points were made:

1.84 million pieces of property are assessed; there is no perfect assessment model.
$22.5 million has been recovered from exemptions that were made in error.
14% of homeowners file appeals; 7-9% had their taxes reduced.
The appeal process is free, open and accessible with no need for an attorney. There have been 211 community outreach events a year to coach citizens on how to appeal.
The private study used in the Tribune article was flawed; the press coverage was unfair.
Over a million evaluations are done utilizing 35 variables. A software package uses data to predict the value of a home.
The focus is on fairness and uniformity of assessments.
The Probit model (created from a $300,000 grant from the MacArthur Foundation) was found to have serious flaws. A purely mathematical approach is not reliable. Therefore, the office uses software initially, but then goes back through with a “hand check” to look for anomalies.

Initially, the assessor’s office agreed to use the Probit model developed by the MacArthur grant. However, they became dissatisfied with the results and stopped using the model. However, they did not notify the Cook County Board and President of the change. When questioned as to why they did not disclose this to the Board, they responded that the MacArthur Foundation paid for the Probit development, not Cook County.

Those testifying for the assessor’s office emphasized their high degree of professionalism and their dedication to do whatever they could to be fair and uniform in their assessments. Assessor Berrios called for an independent body to be created to examine their practices and to recommend changes that would improve the system.

Other Expert Testimony:
Christopher Berry from the University of Chicago and Robert Weissburg, an expert in modeling, gave a different perspective.

Berry stated that the tax system is neither fair nor accurate. Assessments are regressive, with lower priced homes being assessed at a higher rate than higher priced homes. Minority neighborhoods are consistently overassessed resulting in what amounts to institutional racism. Appeals do not remedy this regressivity. It is “taxation without explanation.” The “hand adjusted” method does not provide a transparent mode of assessiment.
Robert Weissburg also emphasized the fact that the system was highly regressive. In 2009 he served on the Foreclosure Commission that was formed at the height of the economic collapse. This is when the Probit model was developed. In 2015 the model was agreed to by the County assessor. However, in 2016, the Tribune found that the model was not being used. Neither the Cook County Board of Commissioners nor President Preckwinkle were apprised of this change.
Weissburg cautioned that the continued use of the current system may well result in liability for damages. The Board needs to fix this quickly and transparently. “Hand checking” is too subject to manipulation.
Public testimony emphasized the regressivity of the assessment process. Many low income homeowners lack the skills to work the system of appeals. Thus, it is the higher income property owners who benefit from the appeals process. The language barrier is yet another impediment to fair treatment.

Following the testimony, Board commissioners asked clarifying questions and inquired as to when the independent group would be formed and ready to begin its analysis of the current system. There was no commitment as to the date that would happen.

Additional Finance Committee Business:
Cook County staff came back to the board for a change order to receive additional funds for the Measurement & Maintenance segment of a $60 million contract already approved by the Board.

The Inspector General raised the issue of changing the scope of work after the work has been approved.
Several commissioners raised objections to this additional funding request.
However, when the Cook County staff was questioned, they found that all of the staff members who negotiated the original contract had left the County’s employ, and many of the answers to commissioners’ questions left with them.
Commissioners were obviously frustrated by this situation.
Contracts that go 20 years into the future are problematical because of the great turnover in employees.

While there was significant resistance to providing the additional funds, commissioners finally did vote to approve, with the caveat that this flawed process needs to be avoided in the future.

Observer - Georgia Gebhardt

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Departmental Budget Hearings Underway on $5.9Billion Cook County Budget

Cook County Treasurer Demonstrates Value of Technology and Offers to Show Others

Assessor and Board of Review State that Tax Bills May be Late if Cuts Made to their Budgets

Cook County Soda Tax Leads to Major Public Speaker Turnout at County Board Meeting

Cook County Board Approves New Procedure for Public Comment at Meetings

Is the Cook County Property Tax Assessment System Fair?

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