Cook County Independent Revenue Forecasting Commission Meeting - July 2, 2026

The Commission convened its second quarterly meeting of 2026 to review the county's preliminary fiscal forecasts, examine significant structural deficits in both the general fund and health enterprise fund, and discuss the impact of federal policy changes and litigation on revenue and expenses. The meeting included introductions of new leadership, approval of prior minutes, and a detailed presentation on sales tax performance and health plan projections.

Consent Calendar

• Approval of Minutes: The minutes from the April 29, 2026 meeting were approved by voice vote and will be filed with the Cook County Secretary of the Board.

Public Comments & Testimony

• No public speakers were registered in person or virtually.

Discussion Items

• General Fund Structural Pressures: Budget Director Kanako Ishidal Mosa White outlined three major pressures: (1) a court ruling narrowing the use of $258 million in transportation-related taxes (use tax, gas tax, parking tax) for eligible expenditures, creating an annual structural deficit; (2) growth in payroll and pension liabilities due to cost-of-living adjustments and increased pension obligations; (3) rising employee benefit costs driven by health care inflation and higher PPO plan selection.
• FY2026 Surplus Projection: Despite pressures, the general fund is expected to close FY2026 with a $283 million surplus, driven by a one-time $150 million cigarette tax settlement and $122.7 million in higher-than-budgeted sales tax revenue. Expenses were reduced by $16.8 million through holdbacks related to the transportation fund ruling.
• FY2027 Deficit Forecast: A $336 million deficit is projected for FY2027, with expense growth outpacing revenue. Base revenue growth of $130.5 million (primarily sales tax) is offset by $258 million in newly disallowed transportation fund expenditures, $108.9 million in payroll increases, $36.7 million in pension growth, and $35.4 million in fringe benefit rises.
• Sales Tax Forecasting Deep Dive: Commissioners discussed the unusually strong sales tax performance (year-to-date 16.5% above prior year actuals and 8.3% above budget). Staff attributed gains to higher retail sales, increased online/remote sales (changing location taxpayers), and two state legislative changes broadening the tax base (January 2025 and January 2026). A separate methodology document is available on the IRFC webpage. Commissioners requested more granular analysis for the next meeting to distinguish between inflation, base broadening, and one-time level shifts. The regression model uses Moody's retail sales forecasts, number of households, and employment; the coefficient on retail sales has increased, indicating a broader tax base.
• Health Enterprise Fund Challenges: Ray presented the health fund forecast. FY2026 is projected to end with a $42.8 million deficit (improved from $50 million in April) due to high managed care claims. FY2027 deficit is projected at $214.7 million, primarily driven by the One Big Beautiful Bill Act (OBA) which reduces County Care membership (especially ACA adult population) and patient service revenues (shift from Medicaid/Medicare to self-pay). New Medicaid managed care contracts (six MCOs, including new entrant Humana) starting January 2027 are expected to further reduce County Care market share. Three scenarios (baseline, optimistic, conservative) were presented for membership, PMPM revenue, and net patient service yields. DISH (Disproportionate Share Hospital) revenue is assumed to continue in baseline/optimistic scenarios but faces a one-year cut in conservative scenario. The hospital system's adjusted fund balance was discussed as a buffer, but it is insufficient to cover projected gaps. Commissioners noted the urgency of structural changes and requested more historical data on collection rates and yield initiatives.
• Long-Term Outlook: The “alligator chart” shows general fund revenues growing faster than expenses, but deficits widen in out-years due to the structural gap. Unassigned ending fund balance is currently between the floor and ceiling for FY2026 but would decline with projected deficits. Commissioners remarked that the outlook is the worst in six years and attributed much of the pressure to federal policies and litigation.

Key Outcomes

• The minutes from April 29, 2026 were approved.
• Staff committed to provide a deeper dive on sales tax drivers (e.g., changing vs. permanent location breakdown, scenario analyses) at the next meeting on July 29, 2026.
• The Commission will continue to review revenue source diversification and methodology documents for both general fund and health fund forecasts.
• The executive recommendation for FY2027 budget will be presented in fall 2026, with updated forecasts and policy proposals to address structural deficits.