Cook County faces budget gap, threats to Medicaid and grants

Cook County, Illinois, faces a general fund budget gap of $102.6 million in 2026, and many county grants are at risk under the new White House and Republican-controlled Congress, officials said Tuesday when the county released its preliminary budget forecast for the next year.

“We have been doing preliminary forecasts for a number of years,” Cook County Board President Toni Preckwinkle said at the briefing. “This one is the most problematic in terms of the environment in which we find ourselves. This is our best guess about where we are going to be next year. We know that the federal budget will significantly impact us.”

Officials say the 2026 general fund budget gap is driven by a surge in base general fund expenses, mostly from increases in salaries and wages and fringe benefits. 

Increases in expenses also came from overtime pay increases in the Cook County Sheriff’s Office, said Budget Director Kanako Musselwhite, who noted that the budget gap has shrunk from almost $500 million when Preckwinkle took office in 2011.

With more than 5 million residents, Cook County is the nation’s second-most populous. It has a $9.9 billion budget this year.

The forecast predicts inflation will remain elevated through the near-term future due to broad, higher-than-expected tariffs imposed by the Trump administration. It expects economic growth to slow in 2025 and 2026 due to the uncertainty around tariffs.

“Threats of drastic funding cuts and the unpredictability of a new federal administration are creating stress for state and local budgets across the country,” Chief Financial Officer Tanya Anthony said at the briefing. “However, years of discipline and fiscal responsibility have positioned Cook County to navigate these uncertainties.”

The general fund is projected to end 2025 with a surplus of $145.1 million, fueled by higher-than-expected revenues from online sales taxes.

The Health Enterprise Fund is expected to have a 2026 budget gap of $108.8 million. A rise in claims through CountyCare, Cook County’s largest Medicaid health plan, are driving the increase in expenses, bringing the fund $76.8 million over budget.

Preckwinkle noted that “60% of our budget is healthcare, and the Medicaid program is the biggest funder of our services, so any dramatic cutbacks in Medicaid — either eligibility or support for our system — would have a devastating impact on us.”

County officials said the impact of Medicaid cuts in Trump’s tax and spending bill are likely to be worse than they’d previously anticipated.

“We were very hopeful that the Senate’s response was going to be more humane. Unfortunately, I think it’s more concerning, in terms of timelines and proposed changes,” said Dr. Erik Mikaitis, chief executive officer of Cook County Health, at the briefing. “We’re working through multiple contingencies… Right now what I can say is that we are not contemplating any workforce reductions, any service reductions.”

The presentation noted the likely impact of Medicaid cuts such as work requirements and redetermination schedule changes and a matching funds penalty for undocumented coverage. It predicted adults may disenroll from Affordable Care Act Medicaid coverage at a faster rate. And it predicted the state will end health benefits for undocumented immigrant seniors. 

It also warned of sweeping risks to county grants from executive and legislative actions.

“Executive orders that cover (certain) areas put many grant programs at risk,” the county said in a presentation shared with reporters on Tuesday. 

“Based on recent legislative actions,” it added, “all county grants are at risk. The (Bureau of Finance) is evaluating which grants are critical for ongoing county operations.”

The county calculated the risk of federal grant reductions or eliminations at $75 million annually.

It calculated the risk from Medicaid disenrollment at a faster rate due to federal changes at $88 million annually, starting with the 2027 budget.

Cook County’s fiscal year begins on Dec. 1. The county’s executive budget recommendation is due Oct. 9. Budget hearings will be held Oct. 27 to 30, and the vote on the budget is scheduled for Nov. 20.

The county’s general obligation bonds are rated A-plus by S&P Global Ratings, A1 by Moody’s Ratings and AA by Fitch Ratings.