Cook County Independent Revenue Forecasting Commission Meeting - May 5, 2026

The Cook County Independent Revenue Forecasting Commission (IRFC) met on May 5, 2026, for a regular meeting which served as the final meeting chaired by outgoing Chief Financial Officer Tanya Anthony. The Commission received detailed presentations on the structural factors driving low revenue growth, a revised General Fund long-term forecast, and an updated Health Fund forecast, highlighting significant deficits beginning in Fiscal Year 2027.

Consent Calendar

• Approval of Minutes: The minutes from the January 28, 2026, meeting were approved unanimously on a motion from Commissioner Merriman, seconded by Commissioner Dabolo.

Public Comments & Testimony

• No members of the public registered to speak, either in person or via the virtual chat.

Discussion Items

1. Staff Presentation on Quarterly Updates and the Long-Term Forecast The presentation covered three main areas: an assessment of low revenue growth drivers, the General Fund forecast, and the Health Fund forecast.

Revenue Growth Drivers & Quarterly Updates:

• Staff reviewed three deliverables from the August Recommendations Report: strategies to mitigate low revenue growth, the impact of OBA provisions on the health enterprise fund, and a sustainability analysis for ARPA-funded programs.
• A key finding was that the County's reliance on volume-based taxes (e.g., gas, alcohol, cigarettes) and a base property tax levy that has not increased in roughly 30 years has led to flat or declining revenue from these sources.
• State-level policy changes, such as the reallocation of Personal Property Replacement Tax (PPRT) revenue and changes to cannabis tax and sheriff fees, have also negatively impacted revenue.
• The ARPA sustainability plan involves allocating a $158 million reserve over four years.
• Discussion: Commissioners inquired about the historical distribution of these tax revenues and the legal feasibility of shifting from volume-based to price-based taxes. Staff explained that state statute mandates volume-based taxation for items like cigarettes, with the policy intent including discouraging consumption.

General Fund Forecast:

• Sales Tax: Year-to-date sales tax revenues were 7.7% ($44.9 million) above budget for the first five months of FY26.
• FY26 Revenue Revision: The FY26 revenue forecast was increased by a net of $222.3 million, bringing the total forecast to $2.9 billion. The largest drivers were a $115 million cigarette tax settlement and a combined $86.9 million increase in sales tax projections.
• Out-Year Projections: For FY27 through FY30, revenues were increased by a total of $455 million.
• Deficit Projections (“Alligator Chart”): The forecast shows favorable results for FY26 but projects significant and growing deficits beginning in FY27. Staff attributed this shift primarily to a January court ruling preventing General Fund revenues from being allocated to cover Transportation Fund expenditures, alongside structural imbalances where expenses are projected to grow faster than revenue.
• Fund Balance: The unassigned ending fund balance is projected to decline significantly in the out-years as a result of the deficits.
• Revenue Scenarios: Forecasts using optimistic, baseline, and conservative scenarios from Moody’s Analytics (March report) were presented.
• Discussion: Chair Anthony and Commissioner Merriman emphasized that the projected deficits must be addressed through policy actions—either raising revenues or cutting expenses—to pass a balanced budget. The Commission discussed the high level of economic uncertainty impacting the forecast due to current federal policies.

Health Fund Forecast:

• FY25 Surplus: The health fund is projected to end FY25 with a surplus of approximately $165 million.
• FY26 Deficit: The FY26 deficit is now estimated at $41-42 million, a significant improvement from the $100 million deficit projected in January, driven by updates on County Care.
• New Policies: Staff outlined two new policies from the FY26 budget resolution. First, a working cash balance for Health Plan Services (HPS) was established, set at roughly 1.5 months of expenses ($393 million). Second, a cash reserve for managed care claims was created. Staff also detailed a newly established adjusted fund balance for Cook County Health (CCH), which allows the health system to transparently reflect its available cash resources separate from non-operating expenses paid by the County.
• County Care Membership: Projections show significant membership declines starting in January 2027, driven by OBA provisions (including more frequent redeterminations and work requirements) and the removal of the dual-eligible MLTSS population. Health Benefits for Immigrant Seniors are assumed to end in July 2028.
• CCH Patient Revenue & Collection Rates: The forecast assumes shifts from Medicaid to self-pay/uncompensated care. The baseline collection rate (yield) for net patient service revenue is projected to decline from roughly 24% in FY26 to 20.6% in FY30.
• DSH Funding: Disproportionate Share Hospital (DSH) cuts have been delayed. The baseline and optimistic scenarios assume no cuts, while the conservative scenario assumes cuts beginning in FY27.
• Discussion: Commissioners requested more detailed projections for CCH payer mix and explored the potential for converting self-pay patients into Medicaid/Medicare coverage to improve collection rates. The challenges of OBA implementation, lagging reimbursement, and the impact of recent federal policy were discussed.

Key Outcomes

• The Commission formally approved the minutes from its January 28, 2026, meeting.
• Staff presented revised General Fund revenue projections of $2.9 billion for FY26 and highlighted the emergence of structural deficits in FY27, driven by the Transportation Fund court ruling and expenditure growth exceeding revenue. The Commission stressed that this requires immediate policy attention from County leadership.
• The Commission reviewed updated Health Fund projections, noting an improved FY26 deficit outlook but continued long-term pressure from OBA implementation and shifts in patient payer mix toward uncompensated care.
• The meeting was adjourned. The next regular meeting is scheduled for Thursday, June 25, 2026, at 5:30 PM.