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The county board approved its 2022 proposed budget and levy on September 14, two weeks ahead of the September 30 state deadline. The levy was set at $11,157,253, a 4.5% increase over the 2021 final levy.
We stared the budget process in April, with preliminary budget requests due at the end of May and final requests on June 30. When we tallied those requests in early July, they added up to a 7.5 percent increase in the levy. Much of this was due to an estimated 10% increase in our health insurance premiums and an estimated 2.5 percent cost of living wage increase. Wages and benefits are well over half of our operating expenses and are usually the largest factor in setting budgets. The county auditor and administrator then reviewed budgets with department heads over the next few weeks. There were several revisions made to revenues and expenses and a few corrections of errors in department budgets that slightly reduced the general fund levy. The highway department needed to increase their construction project estimates, including a salt sand storage building, due to increasing costs. They partially offset this with a reduction to other capital expenditures. They brought their proposed levy down to 3.21 percent by proposing to use $454,857 of their fund balance. Public health/human services revised several of their estimates and reduced their levy to -2.24 percent by projecting to use $100,000 of their fund balance. Both the highway and public health/human service departments had seen large increases in fund balance at the end of 2020 and reducing their levies was a good use of those fund balances. Then we received the unexpected, good news that our health insurance costs were going down 9.3 percent for 2022. 4.3% of the reduction was due to our reduced health care expenses in 2020 and 5 percent was a reduction from our insurance cooperative.
Reductions in health insurance costs are a rare occurrence. It was likely due in part to a reduction in elective surgery and other health care costs because of the COVID pandemic. We expect this reduction to be a one-time event. The savings in health insurance were just over $323,000. Also, during the summer the county board made the decision to go forward with a county housing and redevelopment authority to tackle the long-standing housing shortage and $125,000 was added to the budget for this initiative. The net result of these changes was an improvement to the levy forecast, from an increase of 7.5 percent down to 3.9 percent increase. The final change, made by the board during the approval process, was the addition of a contingency for inflationary expenses, which brought the proposed levy back up to 4.5 percent.
At the September 14 meeting the board also set December 7 as the date for its truth-in-taxation meeting. The TNT public meeting must be held before the county board can set its final budget and levy. Between now and then the board will have much to think about and consider, including: the continuing COVID-19 pandemic. Additional federal funding through the American Rescue Plan Act has been provided to counties both for direct response to the pandemic and for improvements to county services. The county board will have the challenge of allocating that funding in the most effective way for budgetary, public health, and public services purposes. The funds may be spent through the end of 2024 so revisions to the county plans are likely.
For the past couple of years, the county board has been considering issuing bonds for work on the Pike Lake Road using transportation sales tax funding. The size of the project and timing are dependent on both projected sales tax revenues and the interest rates for bonding. The county board will not want to not risk levy funding for the project. Sales tax revenues have risen substantially in the past year despite Covid restrictions. And interest rates have hovered near historic lows. Both factors make the feasibility of bonding for the project favorable. The potential for federal reserve policy changes by year-end and other market forces that could affect these low-interest rates has led the county to consider issuing the bonds this fall.
Inflationary costs. The county has a long list of capital projects that need attention, and we will need to continue to revise cost estimates and work to prioritize those to stay within the budget.
The reappraisal of our BWCA lands. The BWCA annual payment of almost $2 million goes directly to offset the county levy. The every-10-year required appraisal, last done in 2019, cut that payment by a third. But the cut was temporarily delayed when the forest service agreed to reappraise those lands. The first look at the reappraisal isn’t expected until early in 2022, with result in 2023. If the reappraisal turns out to be a cut, that cut will be retroactive to the 2020 through 2022 payments. We are reserving funds for that possibility, with the strong hope of a better result in the reappraisal.
The Truth-In-Taxation statements that will be mailed out in November will reflect all the property taxes levied on cook county taxpayers including the other local levies, fiscal disparities tax and the state general tax. The discussion at the December 7th Truth- In-Taxation public meeting is intended to focus on the county’s proposed budget and levy. It is an opportunity for the public to ask questions and express opinions and for the county to explain its process and the priorities used in developing its budget.
County Connections is a column on timely topics and service information from your Cook County government. Cook County – Supporting Community Through Quality Public Service.
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