You are on page 1of 23

Cook County Preliminary Forecast

June 20, 2019


**Embargoed until 12:01 a.m. June 20**

Toni Preckwinkle
President, Cook County Board of Commissioners
FY2019 Overview

**Embargoed until 12:01 a.m. June 20**


FY2019 Total Budget: $5.94B
Healthcare and Public Safety make up 67% of the Total Budget (88% of the Operating Budget)

**Embargoed until 12:01 a.m. June 20** 3


General Fund Budget: $1.8B
Offices Under the President make up 8% of the General Fund Budget

Offices Under
the President, State's Attorney,
$151.2, 8.1% $126.9, 6.8%
Chief Judge, $256.3, 13.7%

Clerk of the County Assessor, $25.4, 1.4%


Circuit Court,
$96.7, 5.2%

Public Defender,
$77.3, 4.1%

Board of Review, $11.6, 0.6%


Other, $66.3, 3.5%
Pension Payment
and Fixed Charges,
$507.2, 27.2%
County Clerk, $11.2, 0.6%

CC Board of Commissioners,
$8.6, 0.5%
Sheriff, $585.4, 31.3%

Recorder of Deeds, $7.3, 0.4%

Public Administrator, $1.3, 0.1%

County Treasurer, $.9, 0.0%

in millions
**Embargoed until 12:01 a.m. June 20** 4
General Fund

**Embargoed until 12:01 a.m. June 20**


Preliminary 2019 Year-End Projections
The General Fund is projected to end FY2019 $14.9 million favorable to budget

General Fund - FY2019 YE Projection


$1,880

$1,870

$1,860

$1,850

$1,840
Revenue Expenditures
FY2019 Adopted $1,867 $1,867
FY2019 YE Projection $1,872 $1,857

**Embargoed until 12:01 a.m. June 20**


Revenues $4.1 million or 0.2% above the adopted budget
Expenses $10.8 million or 0.6% below the adopted budget.
6
Primary 2019 Variance Drivers
Cigarette Tax down $9.3M/7.8% due to “Tobacco 21” which raised the age to
purchase tobacco products from 18 to 21
Revenu
e
Non-Retailer Use Tax down $2.1/11.4% due to low vehicle sales
Drivers
$4.7M Treasurer Revenue up $5.9M/16.6%

Salaries and Wages expenses down $6.8M/0.5% due to many Offices not
Expense hiring as expected

Drivers
Contractual Services down $4.7M/2.4% due to slowed contracting for
$10.8M planned projects

**Embargoed until 12:01 a.m. June 20** 7


FY2020 Preliminary Forecast
The outlook for FY2020 includes a General Fund deficit projected at $11.9 million

General Fund - FY2020 Forecast


$1,890

$1,880

$1,870

$1,860

$1,850
Revenue Expenditures
FY2019 Adopted $1,867 $1,867
FY 2020 Forecast $1,872 $1,884

**Embargoed until 12:01 a.m. June 20**


Revenues $4.7 million or 0.3% above FY2019 adopted budget
Expenses $16.6 million or 0.9% above FY2019 adopted budget 8
FY2020 Variance Drivers
Sales Tax revenue increase $21.1M/2.5% due to increased consumer spending

Cigarette Tax decrease $13M/10.8% “Tobacco 21” which raised the age to
Revenue purchase tobacco products from 18 to 21
Drivers
New State Revenue: $9.8M
$4.7M Cannabis Regulation and Tax Act - $3.3 million
Illinois Gaming Act – $3.2 million
Sports Wagering Act – $3.3 million

Personnel related expenses up due to Board approved mid-year 2% COLA

Expense
Employee Health Benefits up $11.7M/5.7%
Drivers PPO rates increased by 8%
HMO rates increased by 5.9%
$16.6M PPO membership increased 1.9%

Pension costs down $10.0M/2.9% due to assumptions changes to retiree health


benefit valuations

**Embargoed until 12:01 a.m. June 20** 9


**Embargoed until 12:01 a.m. June 20**
State Fiscal Impact
Tax Name Description Implementation Date Projected Revenue FY2020

Provides that Counties would be


permitted to impose up to a 3% tax on
Cannabis Regulation and
recreational cannabis sales that occur January 1, 2020 $3.3 Million
Tax Act
within municipalities and 3.75% for sales
occurring within unincorporated areas.

Provides that 2% of adjusted gross


receipts generated by the Chicago and
Pending
south suburban Cook casino shall be
Illinois Gaming Act Governor’s $3.2 Million*
paid, subject to appropriation to Cook
Signature
County for criminal justice – Expands
number of gaming positions (slots/video)

Establishes additional 2% tax on


Pending
adjusted gross wagering receipts for
Sports Wagering Act Governor’s $3.3 Million
wagers placed in Cook County. Pays the
Signature
additional 2% tax directly to Cook.

Allows County to apply its 1.75% Retailer


Online Sales Tax Occupation Tax (Sales Tax) to online TBD TBD
sales being made in the County.

*Estimate is limited to County Ordinance revenue collected from expanded terminals in Cook County for existing gambling 10
entities e.g. Rivers Casino and race tracks)
Health Enterprise Fund

**Embargoed until 12:01 a.m. June 20**


Health Enterprise Fund Budget: $2.7B
More than half of the Health Enterprise Budget supports Managed Care operations

Ambulatory &
Community Health
Network , $152.9, 6%

John H. Stroger Jr, Hospital ,


$735.8, 27% Correctional Health,
$95.1, 4%

Health System Administration,


$52.8, 2%

Provident Hospital,
$53.6, 2%

Other, 104022021, 3%

Fixed Charges, $33.0, 1%

Managed Care, $1,549.0, 58%

Department of Public Health,


$13.0, 0%

Oak Forest Health Center, $5.2, 0%

in millions
**Embargoed until 12:01 a.m. June 20** 12
Medicaid MCO Enrollment Attrition
2019 Q1 | Illinois MCO Enrollment 2019 Q1 | Cook County MCO Enrollment

2,160,000 2,153,866 1,040,000


-62,040 1,032,272
2,150,000 -33,039
(-2.9%)
1,030,000 (-3.2%)
2,140,000
2,130,000 1,020,000
2,119,705 1,014,358
2,120,000
2,110,000 1,010,000
2,100,000 2,091,826 999,233
1,000,000
2,090,000
2,080,000
990,000
2,070,000
2,060,000 980,000
Jan-19 Feb-19 Mar-19 Jan-19 Feb-19 Mar-19

Total Illinois Cook County

• Overall population enrolled in MCOs is declining in Cook County and statewide


• Enrollment decline is more rapid in Cook County than statewide; 6.1% decline since the
end of FY2018

**Embargoed until 12:01 a.m. June 20** 13


Cook County MCO Enrollment Attrition
Cook County MCO enrollment declined 15.7% (187K members) since January 2018 peak,
and declined 10.2% (113K members) since April 2018

-113,200
1,200,000 1,186M
members

1,150,000
1,117M 1,112M 1,108M 1,107M
1,097M 1,097M 1,101M
1,100,000 1,093M
1,083M
1,077M 1,072M

1,050,000
1,032M
1,014M
999K
1,000,000

950,000

900,000
Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19

**Embargoed until 12:01 a.m. June 20** 14


**Embargoed until 12:01 a.m. June 20**
Preliminary 2019 Year-End Projections
The Health Fund is projecting a $103.1 million deficit FY2019 year-end

Health Enterprise Fund - FY2019 YE Projection


$2,750

$2,700

$2,650

$2,600

$2,550

$2,500

$2,450

$2,400

$2,350
Revenue Expenditures
FY2019 Adopted $2,690 $2,690
FY2019 YE Projection $2,495 $2,598

Revenues $195.3 million or 7.3% below the adopted budget


Expenses $92.2 million or 3.4% below the adopted budget.
15
FY2019 Variance Drivers
Medicaid/Managed Care down $183.9M/9.1% due to CountyCare
membership lower than the budgeted 345,000 members per month as a result
Revenue of declines in State Medicaid enrollment leading to a 7% increase in charity
and uncompensated care
Drivers
$195.3M Medicare down $5.7M/3.7% due to delays in expanding service lines
targeted to Medicare eligible patients

Overtime expenses up $11.1M/31% due to challenges in health professionals


job market

Expense Salaries and Wages expenses down $35.9M/43% due to unfilled positions

Drivers
Managed Care Claims cost down $28.9M/2% due to lower CountyCare
membership
$92.2M
Professional Services expenses down $25.7M/22% due to shift in
operational focus

**Embargoed until 12:01 a.m. June 20** 16


FY2019 Corrective Action Plan
Cook County Health has presented a Corrective Action Plan to address the projected FY2019
budgetary shortfall of $103.1 million

GME = Graduate Medical Education **Embargoed until 12:01 a.m. June 20** 17
**Embargoed until 12:01 a.m. June 20**
FY2020 Preliminary Forecast
The outlook for FY2020 includes a Health Fund deficit projected at $6.8 million

Health Enterprise Fund - FY2020 Forecast


$2,750

$2,700

$2,650

$2,600

$2,550

$2,500

$2,450
Revenue Expenditures
FY2019 Adopted $2,690 $2,690
FY 2020 Forecast $2,541 $2,548

Revenues $149.6 million or 5.6% below FY2019 adopted budget


Expenses $142.8 million or 5.3% below FY2019 adopted budget 18
FY2020 Variance Drivers
Revenue Medicaid/Managed Care decrease $158.2M/7.9% % due to CountyCare
membership lower than the budgeted 345,000 members per month as a
Drivers result of declines in State Medicaid enrollment leading to a 10% increase in
charity and uncompensated care
$149.6M
Medicare decrease $4.6M/3.0% due to delays in expanding service lines
targeting to Medicare patients

Professional Services expenses down $35.7M/30.1% due operational


improvements
Expense
Drivers Managed Care Claims cost down $36.5/2.6% due to lower CountyCare
membership
$142.8M
Supplies and Equipment down $40.7M/25% tracking with projected clinical
volumes

Employee Health Benefit costs up $7.3M/7.0%

**Embargoed until 12:01 a.m. June 20** 19


Long Term Financial
Planning

**Embargoed until 12:01 a.m. June 20**


Historical Budget Gaps
Structural solutions reduced deficits by 96% since 2011

-600.0

-500.0
-487.0

-400.0

-300.0
-315.2
-267.5

-200.0
-152.1 -168.9 -198.75 -174.2

-100.0 -97.7
-81.8

-18.7
0.0

100.0

200.0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

General Fund Gap Health Fund Gap Total Gap


21
**Embargoed until 12:01 a.m. June 20**
**Embargoed until 12:01 a.m. June 20**
Long-Term Financial Planning
Projected General Fund Surplus/(Deficit)
$2,400.0

$2,000.0 General Fund


Projected
$14.9 ($11.9) ($33.4) ($56.1) ($75.4) ($95.5)
FY21deficit:
$1,600.0
$33.4M

$1,200.0
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
General Fund Revenue General Fund Expenses

Projected Health Fund Surplus/(Deficit)


$3,100.0
Health Fund
$2,700.0 Projected
FY2021deficit:
$2,300.0 $9.2M
($103.2) ($6.8) ($9.2) ($11.8) ($14.7) ($17.9)

$1,900.0

$1,500.0 Total FY21= $42.6M*


FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 22
*Based FY20 Prelim Forecast
Health Fund Revenue Health Fund Expenses
Proposed Budget Calendar
June 20 Release Preliminary Forecast

July 9 Public hearing on 2019/2020 Preliminary Forecast

July 17 Mid-Year Budget Hearings

Aug-Sept Finalize FY2020 budget requests with Departments

October 10 Present President’s Executive Budget Recommendation

October 25 – Department and Public Hearings/Amendment


November 1 System Open

November 8 Commissioner Amendments Due

November 14 Board of Commissioners Vote on Appropriation Bill


23
**Embargoed until 12:01 a.m. June 20**