After months of discussion about cost-cutting and revenue-generating proposals meant to help close a budget shortfall, Kane County Board members approved a balanced fiscal year 2026 budget for the county on Monday.
It was approved 19-4, with board members Mohammad Iqbal, Clifford Surges, Rick Williams and David Young voting against it. The county board had until Dec. 1, the first day of the new fiscal year, to approve the county’s annual budget.
The budget originally passed Monday was about $405.7 million, but, at the same meeting, the board passed a roughly $3.1 million adjustment to account for expenses in some of the elected offices and also $1 million to make up for the loss of a grant.
And the budget is being balanced with the use of about $6 million in reserves, according to the board’s Finance Committee Chair Bill Lenert.
The county’s budget shortfall
Kane County has been facing a looming budget shortfall in its general fund in recent years, which its board has been solving since 2023 by dipping into the county’s cash reserves. Last year, for example, the budget was balanced with the planned use of about $27 million in general fund reserves.
Kane County Finance Director Kathleen Hopkinson has previously cautioned that the county must make significant cuts or find new revenue before 2027 to avoid dipping into its required 90-day reserves, leaving the board this year with the task of finding new revenue or cutting costs to avoid spending down its reserve funds.
One of the major solutions touted by some board members as a solution to the county’s budget woes was a 0.75% sales tax referendum question, which the county board put to voters in the April 1 election. The proposed tax was projected to generate over $50 million yearly for public safety expenses in the county.
But that measure was overwhelmingly shot down, leaving county board members to determine other ways to solve the budget shortfall. They’ve considered a hiring freeze, reallocated a portion of the county’s Regional Transportation Authority sales tax funds from transportation to public safety and asked county departments and offices to cut their individual budgets.
The county’s spending of reserves
The county is using about $6 million in cash reserves to balance the fiscal year 2026 budget, Lenert said at the board’s meeting on Monday. The county was originally expected to use nearly $11 million in reserves to balance the 2026 budget.
The budget approved Monday shows the county using a little under $2.2 million in reserves, but that doesn’t account for some changes made after the approval.
Lenert explained that board members negotiated with the county’s elected offices which had not reduced their budgets to the amounts the board had allocated to them, which resulted in the budget adjustment passed by the board to allocate them additional funding. And, Lenert explained, one office lost a $1 million grant, which the county also allocated reserve funds for.
The $6 million in reserves to be used for the 2026 budget is considerably lower than the $27 million used to balance the 2025 budget. Lenert explained that the county is on pace to spend less than that — around $22 million — this year, despite having budgeted $27 million. He told The Beacon-News that the county is projected to have roughly $12 million to $18 million in surplus funding beyond the required 90-day reserves at the end of the 2026 fiscal year.
Revenue sources: property tax levy and motor fuel tax hikes
On Monday, the Kane County Board also OK’d a property tax levy hike for its general fund of a little under $1.8 million. That amounts to a 2.9% increase from last year, a percentage that was proposed to match the Consumer Price Index, or CPI, which is a measure of inflation set by the U.S. Bureau of Labor Statistics. The maximum percentage the levy can be increased is either the CPI or 5%, whichever is lower.
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Last year was the first year since 2013 that the county board increased the general fund property tax levy except to account for new construction. For fiscal year 2025, the property tax levy went up by about $2 million.
Nearly all of the almost $1.8 million increase approved on Monday is set to go toward the county’s general fund. A small amount of the levy increase will also be going toward the county’s Veterans’ Commission Fund, Hopkinson previously said.
Though approving tax levies for the county’s funds sets the total levy amount the county plans to collect, the actual property tax amount owners pay is not set until after property values are assessed.
Last month, the board also approved a hike in the county’s current motor fuel tax from five cents per gallon to eight cents per gallon, and a 1% grocery tax replacing the state’s grocery tax set to expire on Jan. 1. Both are slated to take effect in the county on July 1.
The expense breakdown
The county’s budget is broken largely into two sections, the general fund and the various special funds, which represent dollars that are restricted to certain uses. The general fund is the one that has been facing a shortfall.
The general fund spending in the fiscal year 2026 budget totals just under $127 million, or a little over $130 million including the roughly $3.1 million budget adjustment approved at Monday’s meeting.
The 2025 general fund budget, by comparison, totaled just under $139 million. Its amended budget for 2025 — which reflects revisions made to the county’s annual budget — puts the figure higher, at a little over $144 million, according to the county.
That puts the county’s general fund expenses at about 10% less for fiscal year 2026 based on the budget approved Monday.
The other major component of the budget is the county’s special revenue funds, which account for a little under $279 million of the draft budget. That is about $1 million higher than last year’s adopted budget, but around $21 million less than the 2025 amended budget, per the county’s figures.
Transportation ‘taking the big hit’
The budget adjustment made Monday giving additional funds to elected offices, although passed by the board, generated some discussion about the county’s allocations, in particular the impact the 2026 fiscal year budget will have on the county’s transportation spending.
Board member Deborah Allan said the balanced budget was “on the back of” reduced spending on capital projects and taking away a portion of the county’s Regional Transportation Authority sales tax funds from transportation to fund public safety, a move approved by the board in August.
The RTA collects a 0.75% tax in Kane and the other collar counties, one-third of which is distributed back to each county for it to spend on transportation and public safety.
In fiscal year 2024, Kane County received just over $26 million in RTA sales tax funding, almost $20 million of which went toward transportation and the rest to public safety and judicial safety funds, Hopkinson has said.
The measure passed by the board changed that allocation so that, in 2026, half of the RTA sales tax revenue the county receives goes toward public safety and judicial costs, while the other half goes toward transportation costs and capital projects.
Allan suggested that if the county board is willing to use reserves to fund the county’s elected offices, the county board should pull more reserve funding for transportation expenses.
“Transportation is also public safety,” Allan said. “And I would make an argument that transportation touches everybody in the county, whereas public safety touches lots of people in the county.”
Lenert, in response, said that the revenue generated by the motor fuel tax hike, expected to be upwards of $6 million annually, will go toward the Kane County Division of Transportation to provide them some additional revenue. He also noted that the reallocation is only for this year, and could be changed in future years.
“If you talk to anybody in the county government here, everyone has a complaint or something they’re not happy with,” Lenert said.
Board member Jon Gripe, however, agreed that transportation is facing an outsize effect from the way the county board allocated its funds.
“It looks as though, feels as though, sounds as though, whatever the right word would be, that transportation’s taking the big hit,” Gripe said. “I know you’re saying, and I believe this to be true, that everybody’s taking a hit, but it looks like transportation’s taken more than their share of cuts to this.”
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Board member Ted Penesis said he would not be opposed to the bulk of any additional revenue coming in being given to transportation “so it’s fair,” while board member Mavis Bates said the Division of Transportation was already in agreement with the amount it was allocated.
And board member Vern Tepe expressed concern that “all of these things are being brought up last-minute,” and also pointed out that concerns with the budget are not limited to its potential impact on transportation spending.
“Nobody is happy with this budget,” Tepe said. “I don’t like even using $6 million in reserves, because, believe me, we’re going to need it next year.”
The board ultimately approved the original budget adjustment brought forward to the board, but Allan’s proposal to allocate more reserves toward transportation failed to gain sufficient support from the board.
But, during the discussion, the board emphasized that the budget can be changed throughout the fiscal year, meaning the figures approved Monday are still likely to change.
“It’s not what we all want, but neither is life,” Kane County Board Chair Corinne Pierog said about the budget after it was approved on Monday. “It’s the best we can do with the circumstances we are given.”