Cook County Releases FY2013 Preliminary Budget Estimates

July 05, 2012

On June 27, 2012, the Office of Cook County Board President Toni Preckwinkle released its annual Preliminary Budget Estimates report for fiscal year 2013. The report summarizes mid-year FY2012 revenues and expenditures, expected current year-end estimates for FY2012 and projected revenues and expenditures for the upcoming FY2013.[1]

The preliminary budget estimate is required by Executive Order 2012-1 issued by President Preckwinkle last year. The Executive Order requires that the County issue a preliminary budget estimate prior to the beginning of each fiscal year. Last year’s estimate was released on July 28, 2011. The preliminary budget estimate is a useful tool to inform stakeholders of the County’s fiscal situation and help shape the development of the final proposed budget. A public hearing will be held on July 18, 2012 on the FY2013 report. Citizens are also able to provide input via the County’s budget website.

The FY2013 preliminary budget reflects the ongoing financial difficulties facing the County as it continues to modernize its operations and deal with growing personnel expenditures. The County anticipates a budget deficit of $267.5 million for FY2013. This shortfall is attributable to a revenue shortfall of $251.4 million and an increase of $16.1 million in expenditures.

The decline in revenue is driven primarily by unfavorable revenue from the Health System of $152.0 million.[2] Other contributing factors include:

• A decrease in sales tax revenue due to the planned 0.25% roll back of the County sales tax of $87.8 million;
• A decrease in Cook County tobacco tax revenue of $20.0 million;
• Continued reductions in court filing fee revenue at the Circuit Court of $12 million;
• A decrease in gas and diesel tax revenue of $3.8 million; and
• The elimination of inheritance tax collections.[3]

Anticipated increases in expenditures are due to:

• Contractual employee wage increases;
• Rising vendor costs for drug treatment programs and food at Cook County correctional facilities;
• Information technology maintenance contracts for the Wide Area Network (WAN);
• Health System technology costs; and
• A lack of reimbursements, primarily from the State of Illinois to the County’s Public Defender for capital litigation-related expenses.[4]

Exacerbating the County’s fiscal challenges is the projected shortfall for FY2012 year-end of $22.4 million, which represents 1.0% of the total General Fund budget of $2.2 billion. The largest contributor is unfavorable revenues of $52.9 million from the Health System, mostly due to a shortfall in patient fees. However, the shortfall is offset by reported savings of $30.4 million for FY2012 from not filling vacancies as quickly as they arise, savings on technology contracts, energy saving initiatives, full-year savings from 2012 initiatives such as managed competition and savings of $10 million in employee healthcare costs.

To address the FY2012 and projected FY2013 deficits, President Preckwinkle said she intends to implement a partial hiring freeze on retirement vacancies, as well as to implement more City-County collaboration initiatives and increased monitoring of department expenditures. Vacancies not covered by the freeze include positions that reduce overtime, increase revenue, are grant funded or “otherwise critical.”