Cook County’s budget for 2022 creates a fiscal cliff and 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 before COVID-19 . That is an increase of 37 percent.
Some have praised Preckwinkel’s proposal for not raising taxes or spending the billion federal incentives at once – more on that below – but the reality is that Cook County’s budget fails for the same reason: the budget sets it Cook County residents onto a fiscal cliff once the free federal money runs out.
The $ 8 billion spending plan has something for everyone, including a “Guaranteed Income” pilot program, $ 80 million in direct cash aid under $ 233 million in community spending, and hundreds of millions more for health care and expansion Medicaid, programs that are sure to be created will have more long-term reliance on the county government.
The pilot program with guaranteed income is particularly astonishing. It is a form of what is known as the universal basic income – money for nothing. If ever there was a time to reintegrate government dependents into the labor market, it is now, with labor shortages everywhere and a record number of job openings. However, Cook County does the opposite.
The county also plans to increase its public sector workforce by 1,600, or 7 percent, to increase operating costs and the county’s already burdensome pension debt.
The following table shows Preckwinkle’s proposal, inflated by the federal government, compared to the 2019 expenditures before COVID. The Health Enterprise Fund is up more than $ 800 million, or 28 percent, while the Special Purpose Fund is up more than $ 750 million, or 118 percent, largely due to the generosity of the federal government.
Preckwinkle says federal funds will be spent in the next few years in such a way that “there are no long-term taxpayer funding obligations,” but she hasn’t specified where the money will come from when the federal windfall runs out.
Much like the Chicago budget, spending decisions were guided by an “equity lens”. It is a misguided approach in which the success of governments is increasingly based on the growth of dependency programs like Medicaid and the Universal Basic Income, rather than on thriving economic growth that is driving residents away from government and into jobs.
Cook County is an extreme outlier nationally
The new budget loses the fact that Cook County is an extreme national outlier when it comes to debt. A Moody’s report in December 2020 showed that Cook County had more liabilities as a percentage of revenue than any other major county in the nation except Bexar County, Texas.
Moody’s analysis found the county had nearly $ 15 billion in long-term debt, more than 500 percent of revenue. Because of this debt, Cook County has earned an A2 rating from Moody’s. To understand what this means, every state in the country has a better rating than Cook County, with the exception of the states of New Jersey and Illinois.
The irony of the “equity” budgets proposed by Lightfoot and Preckwinkle is that the more dangerous their governments pile up in debt, the more they hurt the very people they say they want to help. Debt and retirement costs consume more of the budget, leaving less for public safety, healthcare and classrooms.
We cannot ignore that our analysis of Cook County’s budget differs significantly from the editorial in the Chicago Tribune last week. The board welcomed Preckwinkle and her proposed budget. We’ll look at some of the differences below.
Let’s start with the Tribune celebrating a budget that does not include “new taxes, fines, fees or tax increases”. Chicagoans, it seems, have become so used to facing new taxes, fines, and tax increases that the Tribune thinks it must now praise the government bureaucrats who have been in control of taxes for a year. That praise is completely out of place, especially since the county is bathed in more than $ 1 billion in federal funding.
Not to mention, the county is also benefiting from the recently levied taxes on cannabis, gambling, and online sales. No new taxes? Cook County’s residents could hardly say they won’t be hit hard, especially the minorities who have been forced to flee Chicago and Cook Counties, as evidenced by the decline in black populations over the past few decades.
Notably, the first budget item highlighted in the Tribune editorial is Preckwinkel’s plan to “increase staff” and increase the county’s roster by 7 percent. “Healthy money management is difficult to achieve in the Illinois government these days,” the Tribune said immediately after describing the hiring increase. Did you really mean to say that?
For Wirepoints, it is of the utmost importance for the low-income Cook County residents to take a variety of measures when hiring and in any action that will avoid widening the cost of retirement.
The editor also says, “We like Preckwinkel’s plan for US $ 1 billion profit. She will spread it out over three years. ”We disagree. Their plan creates a chronic reliance on federal generosity and postpones the urgency to restructure and reform the county’s debt. Instead, Preckwinkle should do whatever it takes to use the state windfall to reduce the county’s debt and restructure its onerous work contracts.
The Tribune’s most misguided comment is this: “The lesson for other Illinois governments? Start playing the Cook County tune. “
This is wrong in many ways. There’s no government in Illinois to be emulated, and Cook County would likely 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.
You’re not building any fiscal cliffs there.
Read more about Illinois irresponsible budgets: