Cannabis, gambling and online sales taxes, along with pandemic relief funds, boost Cook County’s bottom line

Cannabis, gambling and online sales taxes, along with pandemic relief funds, boost Cook County’s bottom line
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Cook County Board President Toni Preckwinkle’s 2022 budget proposal nabbed its final seal of approval Thursday morning after commissioners unanimously signed off on the $8 billion plan that does not include new taxes, fees or layoffs.

The board met for just half an hour before voting 17-0 in favor of the proposal, which saw only small changes since Preckwinkle unveiled it a little over a month ago. It was the second time Preckwinkle passed a budget without dissent during the coronavirus pandemic, which officials said had capsized county finances but did not inflict as much disaster as feared thanks to earlier fiscal decisions and federal stimulus funds.

“This budget builds on the progress we’ve made to reform and reshape Cook County over the last decade into a government that equitably serves all of its residents, and it does so without relying on new taxes in the next fiscal year,” Preckwinkle said after the vote.

Thursday’s easy approval was partly made possible by a $1 billion windfall of federal aid under President Joe Biden’s American Rescue Plan. That money will be evenly split across 2022, 2023 and 2024. For the $333 million in next year’s spending plan, about $100 million will make up revenue loss and pay one-time hiring costs, with the rest going toward community recovery programs.

Some of those programs include $80 million in cash assistance, housing support, small business grants and jobs training. That includes a guaranteed income program that has yet to be ironed out. Other buckets will promote mental health support services, public health and violence prevention.

The county was projected to face a $121 million deficit next year, a gap that was plugged not only with the federal funding but also higher-than-expected revenue from new taxes such as those on cannabis, gaming and online sales, the last of which particularly bloomed during the pandemic. This year’s shortfall of $410 million, in contrast, had to be balanced with reserve funds and layoffs.

Other non-property tax revenues such as amusement and hotel taxes are still depressed because of the pandemic, but they are expected to pick back up as tourism returns, Budget Director Annette Guzman said.

Under the new budget, the county’s workforce would grow 7% from 2021 levels to just over 23,000 positions — a level not seen since the earlier years of Preckwinkle’s time as county board president. Many of those positions will go toward the county’s hospital and health care system, which takes up about half of the $8 billion budget.

Next year’s budget is about $1 billion higher than this year’s, mostly because of the health fund that encompasses, among other things, two safety-net hospitals and the county’s sizable Medicaid health insurance care plan, also known as CountyCare. The $501 million jump in the health fund from this year will largely stem from increased CountyCare costs.

As for the general fund, the criminal justice system will again make up the bulk of that spending under Preckwinkle’s budget, with the sheriff’s office using 30% of funds, followed by the offices of the chief judge, state’s attorney, circuit court clerk and public defender. Under a series of amendments passed Thursday, pay for jurors will more than double, and the chief judge’s domestic violence court will offer 24-hour access seven days a week.

In the long term, finance officials said, the county’s prognosis appeared brighter than it did a few years ago. Preckwinkle’s 2022 plan includes a new pension contribution of $325 million and up to $20 million in pension reserves. If the county stays on the current track, it is slated to have a fully funded pension by 2046.

The Civic Federation, an independent government research group, nodded toward the “steady fiscal stewardship” of the county when writing a letter of approval for the 2022 budget.

“These steps have helped the County plan for budget gaps over time and have put the County in a good financial position to recover from the economic disruptions caused by the COVID-19 pandemic,” Civic Federation President Laurence Msall wrote.

Even Commissioner Sean Morrison, a Republican and often the sole dissenter on the Cook County Board, praised the new budget.

“This is a good sound budget,” Morrison said. “Why would anybody not support a budget where we’re not raising any tax or fees on the taxpayers and our residents of Cook County?”