Cook County FY26 & FY27 Preliminary Budget Forecast, July 21, 2026
Cook County FY26 & FY27 Preliminary Budget Forecast, July 21, 2026
At a meeting on July 21, 2026, Cook County CFO Angela Manning and the Bureau of Finance presented a preliminary mid-year budget forecast. They projected a $211.4 million shortfall for FY26 (less than 3% of the annual appropriation) and a much larger gap of over $550 million for FY27, driven primarily by federal legislation (HR1), inflation due to the war in Iran, rising payroll and pension costs, and the ongoing impact of the Road Builders’ litigation. The presentation emphasized fiscal discipline but warned that without structural solutions, reserves would fall below the floor by the end of FY27 and turn negative by FY29.
Public Comments & Testimony
- No public comments were recorded.
Discussion Items
- FY26 and FY27 Budget Gaps: CFO Manning and Deputy CFO Dean Constantina explained that the FY26 gap of $211.4 million (under 3% of appropriations) is manageable, but FY27 shows a combined gap of more than $550 million across the General Fund and Health Enterprise Fund. The primary drivers are the loss of allowable expenses under the transportation fund (due to Road Builders litigation), a projected $108.9 million increase in payroll without new positions, and fringe benefit growth of $35.4 million.
- Revenue and Expense Variances (FY26): The county expects a favorable year-end variance of $266.3 million in General Fund revenue, largely due to a one-time $150 million cigarette tax settlement and $122.7 million above-appropriated sales tax. Expenses are projected $16.8 million below budget. The Health Enterprise Fund expects total revenues to exceed budget by $315.9 million due to a one-time $330 million appropriation adjustment, but base revenue (excluding that adjustment) shows mixed performance: County Care capitation is $103.9 million above budget, while patient fee revenues are $92.9 million short.
- Health Enterprise Fund Pressures: The Fund projects a $214.7 million gap in FY27 due to HR1’s impact on Medicaid eligibility. County Care membership is expected to drop from 379,000 to 334,000, lowering capitation revenue by about $250 million. Net patient service revenue is forecast to drop by $164.8 million, while the uninsured population grows by approximately $100 million. Payroll, pharmaceuticals, and uncompensated care costs continue to rise.
- Fiscal Strategies: The county plans to address the FY27 gap through both expense-side actions (targeted belt-tightening, vacancy assessment, multi-year planning) and revenue-side exploration (leveraging existing assets, new revenue opportunities). CFO Manning emphasized that restructuring will be a multi-year effort, with some revenue ideas targeted for FY28. A more robust long-range budget process will be implemented.
- ARPA Sustainability Reserve: The county will allocate $52.6 million from the ARPA sustainability reserve in FY27 to sustain 12 key programs. A projected gap of $42.3 million remains for FY28-30, which the county plans to address through external funds, program-generated revenues, or scaling down initiatives.
- Pension Fund: The county remains committed to making actuarially determined contributions to the pension fund, which currently has a 68.9% funded ratio. The state’s Public Act 103-0529 ensures contributions are made, with a projected drop in annual contributions after 2047 when legacy liabilities are paid down.
- Impact of HR1 (One Big Beautiful Bill): HR1 is expected to reduce County Care membership by 16.2% and reduce patient service revenues by $45.4 million for CCH. It also affects directed payments. Commissioner Trevor requested a total estimate of HR1’s cumulative impact; the budget director noted an approximate $138 million impact on FY27 alone, with a total of $405 million since FY25 base, pending CCH confirmation.
- Digital Ad Tax Preemption: General Counsel Laura Lechowicz-Felicione explained that the state’s digital ad tax preempts county home rule authority to implement a similar tax, though the county could advocate for a share of the revenue if litigation is resolved favorably.
- TIF Surplus: Information on the FY27 TIF surplus will not be available until October, when the City of Chicago declares its surplus.
- Cannabis and Vape Taxation: The county projects $12 million in cannabis tax revenue. Commissioner Gainer requested an analysis comparing that revenue to costs of law enforcement, public health, and hospital systems related to cannabis use. Vape taxes are projected at $6 million in FY26 and $6.5 million in FY27, with proceeds going to the General Fund.
- Vacancies and ARPA Spending: The county has approximately 2,900 vacancies as of May 31. The budget director will include vacancy analysis in the FY27 executive recommendation. ARPA has about $80 million outstanding (allocated but unspent or pending reimbursement); the county is working to ensure all funds are spent by year-end, with potential transfers to high-utilization programs like the homeowner down payment assistance program.
- Economic Indicators: Deputy CFO Constantina described using Moody’s Analytics scenario analyses to incorporate the impact of the war in Iran and other geopolitical events into revenue forecasts. Inflation and energy prices are expected to slow GDP growth in 2027, affecting sales tax revenues.
Key Outcomes
- The Board will receive ongoing updates through monthly revenue/expense reports, the IRFC report in October, and the executive budget recommendation.
- The county will continue aggressive advocacy at the federal and state levels, including a planned trip to Washington, D.C., in mid-September to address HR1 and other federal issues.
- The Bureau of Finance will explore and present new revenue options (horizon one short-term, horizon two long-term) to the Board.
- CFO Manning committed to providing a deeper analysis of HR1’s cumulative financial impact on the county.
- Commissioner Scott requested and will receive (via the chair) a detailed breakdown of all FTEs and vacancies to inform belt-tightening discussions.
- The Board acknowledged the risk of potential pension fund consolidation with the City of Chicago and will continue to monitor pension legislation in Springfield, opposing any such moves.
Meeting Transcript
Okay, thank you. Good morning. Can everyone hear me? Good morning, Board of Commissioners. Thank you. It is a pleasure to be here as the CFO to provide an overview of our preliminary forecast, which is the mid-year projection of the year-in revenues and expenses for fiscal year 26 and an initial forecast of the projected FY27 revenues and expenditures for our two major operating funds, the General Fund and the Health Enterprise Fund. We present this preliminary forecast while navigating several uncertainties. These projections are based on what we know today. FY26 has already been filled with several challenges with additional difficulties expected in fiscal year 27. However, it is important to recognize that the years of discipline and financial responsibility have put the county in a strong position to address these challenges and are positioned to continue the important work and priorities of President Pret Winkel and the Board of Commissioners. While outside factors can cause unexpected changes to the revenue and expenditure projections we are putting forward today. This preliminary forecast is designed to provide a transparent look at the current and anticipated Cook County budgets. We will continue to monitor the ever changing fiscal environment and provide relevant updates in the forthcoming budget recommendation. I want to thank the entire Bureau of Finance for the work they do every day. I have only been here about a month, and I can already see what a great team we have in place. Our strong finance team starts with this impressive team. Also want to thank the entire Board of Commissioners for your input and guidance. I look forward to working with each and every one of you as we continue to put forward important initiatives while being mindful of our long-term finances. And with that, I believe we are ready to start our presentation with CANACO. Good. Good morning, Commissioners. Today's presentation begins with a review of a key economic indicators that influence financial outlook, not only for the county, but also nation as a whole. We will then provide an overview of the preliminary year-end forecast for fiscal year 2026 and the initial projection for 2027 for the county's two largest operating funds, General Fund and the Health Enterprise Fund. Finally will conclude with updates on our ongoing commitments. With that, I pass to our deputy CFO, Dean Constantina. Thank you very much, CANACO. So, as you are all aware, the county's revenues are really closely tied to economic conditions. So whenever we open the preliminary budget, we want to make sure we understand what is happening in the economy today and kind of what we expect in the future. So since COVID, we have seen a real precipitous drop in the rate of inflation to a level that approached normal at the end of last year. However, largely due to the war in Iran, we have seen some increases in the rate of inflation as higher energy prices begin to impact other commodities. We can reasonably expect that these increases in inflation will also impact the cost of goods for the county and the members of our community. Real gross domestic product, which is closely tied to our sales tax revenue growth, is expected to remain about the 2 percent 2 percent level across our forecasting period as kind of assumed by most of the major forecasters. However, more recent forecasts, like those developed by Moody's and the survey of professional forecasters, are coalescing around the idea the higher energy prices at the start of this year will translate into slower growth in 2027. In total, economic indicators are being depressed by the war in Iran and the corresponding impact on commodity prices. These are factors that are outside of our control but have a direct impact on our revenues. So it is very important that we keep an eye on these as we plan for the future. What is also largely outside next slide, please. What is also largely outside of our control is the impact of Federal legislation. The one big beautiful bill or HR1 is expected to have a significant change on our FY 2027 revenues. The legislation takes direct aim at Medicaid recipients, particularly the ACA adult population, which is projected to decline by about 16.2 percent at county care. And translates to a $944 million difference if we were to compare it to what we would have expected prior to the passage of HR 1. HR1 is also expected to decrease the patient service revenues and directed payments that Cook County Hospital system is expected to receive. As people lose access to Medicaid, those that cannot afford insurance are forced to pay out of pocket. These self-pay patients are much less likely to pay their bills. And this translates into a $45.4 million reduction in patient fees and directed payments for CCH, but for the passage of HR1. I'll now turn it over. So these and some other external factors are really what's uh resulting in a projected preliminary gap that is really nominally the largest we've seen in nearly 16 years. And I'll I'll turn it over to our budget director to provide us with more details about that. Thank you, Dean. The bar graph here illustrates county's historical budget gap.
openpublica.com