Preckwinkle's 2021 Budget Plan Avoids Tax Hikes, Counts On Extra Money From Online Sales Taxes, Marijuana, And Sports Betting

CHICAGO (CBS) -- Despite a projected $410 million budget shortfall next year in large part due to the pandemic, Cook County Board President Toni Preckwinkle is proposing a $6.9 billion budget plan that avoids any new taxes, by counting on a mix of "modest" layoffs, eliminating vacant positions, and bringing in additional tax revenue from online shopping, sports betting, and legal marijuana.

"Given the extraordinary times, I'm grateful for the hard work of our team not just this year, but reflects I think the hard work of the last decade, to put us in a place where we can deal with this rainy day so effectively," Preckwinkle said at a budget briefing Wednesday afternoon, ahead of her budget address to the Cook County Board on Thursday.

Preckwinkle's spending plan for next year relies on a mix of staffing reductions, increased revenue from existing tax streams, and drawing down on reserve funds.

Under the 2021 budget plan, the county would reduce its overall employee headcount by 254 positions. That includes eliminating 659 vacant full-time positions, and 130 proposed layoffs in the county's health and hospital system. However, the county also expects to hire hundreds of other new positions, including approximately 400 contact tracers amid the ongoing COVID-19 pandemic. The county also expects to hire 142 other full-time positions within the health and hospital system, primarily at Stroger Hospital.

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The county also will be able to use federal coronavirus relief funding to help close its budget gap. That federal funding expires Dec. 31, but because Cook County's fiscal year begins Dec. 1, the county will be able to use $50 million in COVID relief funds for 2021, according to chief financial officer Ammar Rizki. The county is not counting on any additional federal coronavirus relief funds next year.

For the first time in 2021, Cook County also will be bringing in revenue from online sales taxes collected by the state, as well as from legal marijuana sales and from legalized sports betting. Budget officials said the county expects to collect about $80 million in online sales tax revenue, $14 million in marijuana taxes, and $3.6 million from sports betting taxes.

The county also plans to use about $77 million from existing reserves to help balance the budget. Rizki said the county currently has about $400 million in reserves.

Next year's budget includes plans to move two clinics -- the Near South and Woodlawn health centers -- to Provident Hospital, which county officials said would allow for expanded services and better access, even though Provident Hospital is approximately 3 miles away from both clinics. Provident Hospital's emergency room also will be converted to a "standby" emergency department similar to an urgent care facility, with a greater focus on outpatient care. The standby emergency room will remain open 24/7.

Provident Hospital also is close to opening a new dialysis center, a new lifestyle center, and a new colon cancer prevention program.

Stroger Hosptial's inpatient pediatric unit also would be suspended, due to a low volume of patients. Andrea Gibson, Cook County Health's chief business officer, said it's a national trend that pediatric patients are more likely to require outpatient treatment or, in severe cases, at specialty hospitals like La Rabida or Lurie Children's Hospital.

Meantime, the county plans to expand its outpatient mental health programs, as well as coverage for children with special needs under County Care, a Medicaid-funded program serving low-income residents.

Preckwinkle's budget team said the 2021 spending plan also includes $40 million for a COVID-19 contact tracing program, as well as $20 million over the next two years for various "restorative justice" programs:

  • $2.5 million towards adult anti-recidivism, violence prevention, and restorative justice grants to community-based organizations in the suburbs.
  • $2.5 million towards youth violence prevention, restorative justice, development, and leadership programs in the suburbs.
  • $5 million for housing support programs for convicted criminals recently released from prison and pre-trial defendants on electronic monitoring.
  • $2 million for violence reduction and outreach programs in the suburbs and the city of Chicago.
  • $3 million for re-entry services for recently released convicts, including mental health and substance abuse programs and workforce training.
  • $5 million for felony drug diversion programs, restorative justice supportive services, and bond court peer support.

The budget plan also includes $5 million for small business assistance programs, $2 million for workforce training programs, and $13 million for housing assistance in low-income communities.

Although the budget plan could be considered good news for taxpayers for now, budget officials cautioned that the pandemic could deal another blow to the county's finances, especially if there is not a widespread vaccine available within the next year, and if there is not further federal relief funding should the economy take another hit. Under such a worst-case scenario, Preckwinkle's budget team expects the county's finances could take a $328 million hit by 2022.

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