Shutdown impacts county coffers

January 27, 2019

KANKAKEE — The battles between Donald Trump and Nancy Pelosi have an effect right here in Kankakee County.

Washington’s lack of an agreement had resulted in the longest shutdown in U.S. history, which lasted more than a month before an agreement to reopen for three weeks was reached Friday.

This has created cash flow issues for the county government, which expects to borrow a lot more money than usual because of the shutdown.

The county heavily depends on federal money because it jails federal inmates for the U.S. Marshals Service and Immigration and Customs Enforcement. It gets up to $1 million per month from federal coffers.

The last payments from the federal government were in November, according to the county.

In normal times, the county would need about $2.5 million in tax anticipation warrants, said Steve McCarty, the county’s finance director. Those are loans from banks that would help the county make ends meet until property tax money comes in.

On Wednesday, the county board’s finance committee approved a request to borrow up to $7.2 million, depending on how long the shutdown lasts. The full board is expected to vote on the issue next month.

Finance committee member Ron Kinzinger, R-Bourbonnais, wondered whether the county should continue accepting federal inmates and “digging a deeper hole.”

County board chairman Andy Wheeler, R-Kankakee, said he recommended continuing accepting inmates.

“If we made any changes in revenue coming in, we would just have expenses for 60 days. We’d be shooting ourselves in both feet if we stopped the program before we wait for the shutdown to end,” Wheeler said.

The county’s books have been in the red for years, but the situation has brightened over the last year with more federal revenue and lower juvenile detention costs, among other factors.

Wheeler said the county would have to build a reserve of $5 million to $8 million before it could stop borrowing annually against the following year’s tax money.

“A surplus is only a surplus once you get through the tax season,” he said.

Wheeler described the county as “cash poor,” saying the lack of federal money “couldn’t have happened at a worse time.”

The county expects to borrow the money at a 3.5 percent interest rate, but McCarty said the federal government gives some compensation for interest.

“I don’t know if it’ll be a wash,” he said.