Cook County’s 2022 budget creates fiscal cliff, increases spending by nearly 40% over pre-COVID 2019 – Wirepoints

By: Ted Dabrowski

Two weeks ago the City of Chicago dug its fiscal hole deeper with an irresponsible budget and now it’s Cook County’s turn. Cook County Board President Toni Preckwinkle has proposed spending $8 billion in 2022, $2.2 billion more than the $5.9 billion the county spent in pre-COVID 2019. That’s a 37 percent increase.

Some have lauded Preckwinkle’s proposal because it doesn’t have a tax increase and doesn’t spend the one billion in federal stimulus all at once – more on that below – but the reality is the Cook County budget is a failure for the same reason Chicago’s is: The budget sets Cook County residents up for a fiscal cliff once the free federal money is gone.

The $8 billion spending plan has something for everybody, including a “guaranteed income” pilot program, $80 million for direct cash assistance as part of $233 million in community spending, and hundreds of millions more for health care and Medicaid expansion, programs sure to create more long-term dependency on the county government.

The guaranteed income pilot program is particularly astonishing. It’s a form of what is called universal basic income – money-for-nothing. If ever there was a time to move government dependents back into the workforce it is now, with labor shortages everywhere and a record number of job openings. Yet Cook County is doing the opposite.

The county also plans on increasing its public sector headcount by 1,600 staff, or 7 percent, sure to beef up operating costs and the county’s already onerous pension debt.

The below table shows Preckwinkle’s federally-inflated proposal compared to pre-COVID’s 2019 expenditures. The Health Enterprise Fund is up more than $800 million, or 28 percent, while the Special Purpose Funds is up more than $750 million, or 118 percent, mostly due to the federal government’s largesse.

Preckwinkle says the federal money is being spent over the course of the next few years in a way that leaves “no long-term funding obligations from the taxpayer,” but she didn’t specify where the money will come from when the federal windfall runs out.

Much like Chicago’s budget, spending decisions have been guided by an “equity lens.” It’s a misguided approach where government success is increasingly based on the growth in dependence programs like Medicaid and universal basic income, and not on thriving economic growth that gets residents off of the government rolls and into jobs.

Cook County is an extreme outlier nationally

Lost in the new budget is the fact that Cook County is an extreme outlier nationally when it comes to debt. A Moody’s report in December 2020 showed Cook County had more liabilities as a percentage of revenues than any other large county in the nation except for Bexar County, Texas.

Moody’s analysis reported the county had nearly $15 billion in long-term debts, more than 500 percent of revenues. That amount of debt has left Cook County with an A2 rating from Moody’s. For a guide of what that means, every state in the country has a better rating than Cook County except bottom-of-the barrel states New Jersey and Illinois.

The irony of the “equity” budgets proposed by Lightfoot and Preckwinkle is that as their governments keep racking up more dangerous debt levels, the more they hurt the very people they claim they want to help. Debt and pension costs are sucking up more of the budget, leaving less for public safety, health care and classrooms.

Diverging opinions

We can’t ignore that our analysis of the Cook County budget differs markedly from the editorial in the Chicago Tribune last week. The board was complimentary of Preckwinkle and her proposed budget. Below we tackle some of the differences.

Let’s start with the Tribune’s celebration of a budget that has no “new taxes, fines, fees or tax increases.” Chicagoans, it seems, have gotten so used to getting hit with new taxes, fines and tax increases that the Tribune feels it must now lionize government bureaucrats that hold the line on taxes for one year. That praise is entirely misplaced, in particular since the county is being bathed with more than $1 billion in federal funds.

That’s not to mention the county is also benefiting from recently imposed taxes on cannabis, gambling and online sales. No new taxes? Cook County residents would be hard pressed to say they aren’t being hit hard, especially the minorities that are being forced to flee Chicago and Cook County, as evidenced by the drop in black populations in recent decades.

Remarkably, the first budget item highlighted in the Tribune’s editorial is Preckwinkle’s plan to “staff up” and grow the county’s roster by 7 percent. “Sound money management is hard to come by these days in Illinois government,” the Tribune said immediately after describing the hiring increase. Did they really mean to say that?

For Wirepoints, holding the line on hiring and doing anything that avoids an expansion of pension costs is paramount to better outcomes for Cook County’s low-income residents.

The editorial board also says “We like Preckwinkle’s plan for the $1 billion federal windfall. She’ll spread it out over three years.” We disagree. Her plan creates a chronic dependence on federal largesse, postponing the urgency to restructure and reform the county’s debts. Preckwinkle should, instead, do everything she can to use the federal windfall to reduce the county’s debts and restructure its onerous labor contracts.

The most misguided comment from the Tribune is this one: “The lesson for other Illinois governments? Start playing Cook County’s tune.”

That’s wrong in so many ways. There is no government in Illinois that should be emulated and Cook County would probably be one of the last.

The Tribune didn’t have to look far for far better examples. Indiana, Missouri and Iowa are all AAA-rated states with growing populations.

They aren’t building fiscal cliffs over there.

Read more about Illinois’ irresponsible budgets:

 

21 Comments
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The Paraclete
2 years ago

I only glance at the Trib to see what they’re reporting then look elsewhere for the details. The Trib is nothing but Lori propaganda. Bootlickers!

TiredoftheBS
2 years ago

People expect a Democrat to govern and spend wisely? GTFOOH!

Don’t Care
2 years ago

For the 30 years I can remember I have been hearing about the sky and how its falling in Chicago. Yet it never seems to happen…..weird

Admin
2 years ago
Reply to  Don’t Care

Have you been downtown lately? It’s nearly empty. Have you been to many of our smaller cities away from Chicago? Most are impoverished.

Last edited 2 years ago by Mark Glennon
debtsor
2 years ago
Reply to  Don’t Care

Chicago will never be a Syria situation where refugees are fleeing by the hundreds of thousands. But Chicago by every metric is no longer the city of big shoulders. It is run by inept losers and its decline is slowed only by the inertia of the corporate and business world that is too bureaucratic to leave.

TiredoftheBS
2 years ago
Reply to  Don’t Care

It’s a slow motion fall and you have just not been paying attention close enough.

streeterville
2 years ago

Mother to a gangbanger, mother-in-law to a murderer. That’s our county president in a nutshell; the rest is just SJW theater.

Old Spartan
2 years ago

As for the Tribune’s analysis of this, you have to wonder who at that formerly competent news staff is capable of analyzing all of this. Obviously total ignorance of economics, budgeting and basic accounting principles. The Trib’s Business section is a joke now. No business expertise of note. If you look at the source of most of their stories, it is almost all New York Times or AP. Fortunately, readership at this shadow of a paper is down so much not many people will read this call to copy Cook County.

BB
2 years ago

Citizens Leave cook county and chicago now! The cliff is getting closer!

The Paraclete
2 years ago

She needs the money for her vote buying campaign. She’s pledged to throw more money around than Lori.

Mike
2 years ago

Wirepoints once again interpreting government lies and press incompetence.

Connecting the dots between the economy (driven by lies), dishonest government and largely sucker public.

Day after week after month after decade.

American Greatness in action.

Admin
2 years ago
Reply to  Mike

Mike, that truly would be a more accurate tagline for us.

nixit
2 years ago

Embedded in the Special Purposes Fund is the newly created Equity Fund which has its own 50 member taskforce, one of which is the People’s Lobby. $53 million waiting to be spent.

Combined with other equity-focused initiatives, the County will invest roughly $53 million in FY22 with the advice of the Equity Fund Taskforce, a 50-member group, including representatives from other Cook County agencies, advocates, community-based organizations, and philanthropic, civic, and academic institutions. This builds on my commitment to creating safe, thriving, and vital communities through additional investments in our Equity Fund.

Mike
2 years ago
Reply to  nixit

Cook County Equity Fund Taskforce Confirmed Participating Organizations. Last updated: May 6, 2021. External Organizations: • ACLU of Illinois • Alliance to End Homelessness in Suburban Cook County • Arise Chicago • Brave Space Alliance • Cabrini Green Legal Aid • Center for Neighborhood Technology • Chicago Area Fair Housing Alliance • Chicago Community Bond Fund • The Chicago Community Trust • Chicago CRED • Chicago Jobs Council • Children and Family Justice Center, Northwestern Pritzker School of Law • Field Foundation • Greater Chicago Food Depository • Health and Medicine Policy Research Group • Housing Action Illinois • Illinois… Read more »

GM
2 years ago
Reply to  Mike

I work at a “workforce development” non – profit that trains low – income people for good careers in the manufacturing sector (welding, CNC, press brake). Although our agency is not listed above, we work with many of those listed, and receive very major funding support from several. I can tell you that MUCH of this money will be wasted on junk like “diversity training”, “equity studies”, etc. Some of these agencies I see are already putting out job postings for lucrative make – work executive jobs, most paying up to c. $75K. Some of this money will be put… Read more »

Mike
2 years ago
Reply to  nixit

Cook County Goverment. President Preckwinkle Announces Launch of Cook County Equity Fund Taskforce. Thu, 05/06/2021 – 12:00. Budget and Financial. Cook County Board President Toni Preckwinkle today announced the launch of a more than 50-member taskforce to advise her administration on strategic investments from the new Cook County Equity Fund, which addresses historical disparities and disinvestment in Black and Latinx communities. The Cook County Equity Fund was established by President Preckwinkle in the County budget approved last November with an initial investment of nearly $100 million. Combined with other equity-focused initiatives, the County will invest roughly $120 million in in… Read more »

Heyjude
2 years ago
Reply to  Mike

Anybody who can write that is not tethered to reality.

Full blown insanity on display, and presented as the ultimate goal of society.

debtsor
2 years ago
Reply to  Heyjude

‘The strategy includes continuing to reduce the population of Cook County Jail while safeguarding public safety; reducing recidivism; tackling gun violence; and eliminating the use of cash bail, which disproportionately penalizes the indigent and people of color – all with the aim of providing fair and equitable access to justice” I feel comfortable saying that most people agree these are all some of the biggest issues facing Cook County. All of us who live here want to make this a better place to live. But Toni’s strategy is nothing more looting the public treasury of $120,000,000 and handing it to… Read more »

Last edited 2 years ago by debtsor
nixit
2 years ago

The county has a pension stabilization account, which seems odd because the best way to stabilize the county pension fund is to contribute directly to the fund.

The County established a Pension Stabilization account in the Pension Fund in FY2019, that serves as a reserve in line with its long-term goal of continued commitment to address the Pension Fund’s liabilities in a responsible manner. For FY2021, the account is budgeted to receive up to $20.0 million in revenues to help further cushion any future increases in funding needs to offset the unfunded liabilities of the Pension Fund.

ConcernedExpat
2 years ago

Please refrain from putting up pictures of Toni Preckwinkle and Lori Lightfoot for all of our sakes

Frank James
2 years ago
Reply to  ConcernedExpat

Well it’s almost Halloween, after all.

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