Cook County 2023 Budget Hearings Begin with Commissioners Focusing on Oversight Of ARPA and Equity Fund Spending

Cook County Finance Committee Meetings on the Budget
October 24, 2022, 10 am to 12:30 pm

During the overview of the proposed 2023 budget by the Bureau of Finance and the presentation concerning the Offices under the President, Commissioners Daley, Degnen, Gainer, and Miller focused on the need for an independent evaluation of the programs being funded by the Equity Fund (funds from the County) and by the American Rescue Plan Act (ARPA funds from the Federal government).  The Commissioners suggested regular meetings (quarterly or every two months) to get status reports and to have opportunities for the public to weigh in.  The Commissioners noted that the $1 Billion in ARPA funds provides the County with an unprecedented opportunity to make lasting positive changes.  But the Commissioners said that there will  undoubtedly be ways to improve and the County needs to identify those sooner rather than later.  In that regard, Commissioner Degnen suggested there might be a possible budget amendment to add 1 to 2 FTEs to the County Auditor department.

Bureau of Finance/Budget Overview - Presented by Interim CFO Lawrence Wilson, Budget Director Annette Guzman, and Deputy CFO Dean Constantinou.

Overall budget is $8.75 B (including Capital and Grant funds)

• 7.8% increase over 2022, mainly due to federal funds
• $7.23 B of total is Operating Funds, with 78% of that for public health and safety
• While budget has grown by $5.21 B (a 10.6% compound annual growth) since 2014, the core services have grown by a compound annual growth rate since 2011, in line with revenues.  Much of the growth in the overall budget is due to the growth of CountyCare (the managed care program funded by Federal and State funds for Medicaid recipients).  
• Proposed FTEs (full-time equivalent employees) are 23,731, the highest level over the past 10 years.

The General Fund portion of the Overall budget of $1.97B is slightly less than 2022.  The projected increase in sales tax revenues partly offsets the transfer of Transportation Home Rule Taxes from the General Fund to a Special Purpose Fund and the transfer of Canabis Taxes to the Equity Special Purpose Fund.

• Sales Taxes now make up 55% of the General Fund, with the next highest source being Property Taxes at 15%.
• 54.5% of the General Fund goes to Public Safety, 32.2% for Fixed Charges and others, 10% for Finance and Administration, 3.6% for Property and Taxation, and 0.8% for Economic Development.
• Key Priorites for the General Fund are (1) to increase personnel to implement the Pre-Trial Fairness Act (effective Jan. 1, 2023), (2) contribute funds to the Land Bank, (3) support the delivery of property tax bills through technology and funding for the Property Tax Bridge Fund due to late 2nd installment bills in 2022, and (4) additional funding from the General Fund to the Equity Fund.

The Health Enterprise Fund portion of the Total Overall Budget is $3.99 B. a 3% increase over 2022. 

• County Care membership is projected to decline from over 425,000 to about 366,000 by the end of 2023 due to people having to re-qualify for Medicaid.

There are also Special Purpose Funds that make up the Overall Budget.  The presentation focused on 4 of these:

• The Equity Fund is proposed to utilize $74 M this year for Justice Advisory Council grants (violence prevention and returning residents) and Taskforce initiatives to reduce systemic barriers
• The Transportation Fund (new) of $237 M that will go toward Public Safety offices
• The Covid-19 Emergency Rental Assistance Fund, currently proposing $18 M, but additional grant money from the Federal government is expected so this could increase.  Since this fund started in 2021, $144 M has been distributed.
• ARPA, with the County now in Phase IV (implementation and monitoring) with Phase V (reporting and evaluation beginning in the summer of 2023).  Over $270M in community investments are slated for 2023.  A new platform to track all aspects of the program and fiscal management is being developed.

The County is doing long-term fiscal planning, and projections thru 2027 are that the General Fund revenues are expected to keep pace with expenses and that the Health Fund revenues will be just short of expenses.  

Under the County’s Fund Balance Policy, the County is using the amount in excess of 3 months of General Fund expenditures to assign $231 M to the Pension Stabilization Fund, Self-Insurance Fund Reserve, Cook County Health Reserve Fund, the Infrastructure and Equipment Fund, and the Equity Fund, along with $30 M to spend in 2023 in the General Fund.

The County is also starting to plan for how to determine what ARPA funded programs should continue after 2026 and how to fund them.

Offices under the President - Presented by the President’s Chief of Staff, Lanetta Haynes Turner
The Offices include the 

• Bureau of Asset Management (35% of the General Fund Budget attributed to the President)
• Bureau of Finance (18%)
• Bureau of Administration (14.6%)
• Bureau of Technology (13.7%)
• Bureau of Economic Development (7.3%)
• Bureau of Human Resources ( 5.5%)
• Office of the President (3.4%), County Auditor (1%), Human Rights & Ethics (0.8%), and Administrative Hearings (0.8%)

Much of the presentation repeated and expanded on information provided in the Budget Overview,and the Commissioners reiterated the need for independent review and oversight of the Equity and ARPA funds.  Ms. Turner also presented some highlights of the proposed spending under the different categories of the Policy Roadmap.  There were no questions on those projects, nor were there information or questions on the individual budgets or performance of the individual Offices.

Office of the Public Administrator - Presented by the Public Administrator Louis G. Apostol

• This office administrates estates when the decedent leaves no will or the named executors cannot serve.  The office is funded by the fees for administrating those estates, and not from tax revenue. 
  
• Through fees, interest, court costs, and funds for unknown heirs, the office has generated over $4.5 M in revenues with expenses of only $1.5 M in 2022.

Observer - Priscilla Mims