For years, Kane County has been facing the same money problem: a looming shortfall in its main operating fund, the reserves of which the county continued to spend down to pay for its expenses.
The Kane County Board had long been warned that dipping into the general fund’s coffers to balance the county’s annual budget wouldn’t be an option forever, and that it had until 2027 to make significant cuts or find new revenue to avoid falling below 90 days’ worth of expenses in reserve funding, which it is county policy to keep available.
Last month, the county successfully passed a balanced, $402.9 million budget for fiscal year 2027, which starts on Dec. 1. Though adjustments to the budget could be made later on, should the budget’s revenue and spending projections be correct, this upcoming budget puts the county on pace not to dip further into the dwindling fund’s remaining reserves next year.
The following week, the county board OK’d a roughly $2.3 million property tax levy hike for 2027, one of the revenue sources the balanced budget relies on.
However, while some of the county board’s members have cast this new budget as a step in the right direction, the county remains faced with a much diminished general fund.
In fact, according to Kane County Finance Director Kathleen Hopkinson, the fund’s unallocated balance currently sits below the required 90 days’ worth of expenses. Based on 2026 figures, the county would need to have available $32.5 million in order to be in line with that policy. As of August, the county had only about $25 million — though it is over the 90 days’ worth if taking into consideration other special reserve accounts.
The fund is expected to still be slightly under in 2027 as well, Hopkinson told the board last month.
Now, the county has a balanced budget and reduced spending, but still doesn’t appear entirely out of the woods with regards to its financial woes. So what’s next?
First, a little history.
According to Hopkinson, the years 2020 through 2022 are “forever skewed,” as far as the county’s finances are concerned, because of the money local governments received at that time as a result of the COVID-19 pandemic.
The $1.9 trillion American Rescue Plan Act, commonly called ARPA, was signed into law by former President Joe Biden in 2021, with the goal of helping the United States deal with the COVID-19 pandemic and help out the economy. Part of that relief package was a $350 billion program to distribute aid to state and local governments, meant to support their response to and recovery from the pandemic.
Kane County’s share was about $103 million in total. Of that, a significant portion went to expenses directly related to responding to the pandemic, such as vaccination. But some of the funds went to things like government operations and capital projects.
As far as the county’s finances are concerned, Hopkinson explained, what this meant is the COVID-era federal money was available to fund many of the county’s expenses, even while it was still receiving its usual revenues — property taxes, sales tax, etc.
So the county’s rainy day fund increased over time.
But, eventually, the COVID-era money was gone, and expenses again needed to be paid with the county’s usual funding sources, Hopkinson told The Beacon-News last month, so the county began spending down its reserves in large chunks in the years that followed.
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This situation was coupled with increasing expenses, Hopkinson said.
For example, the county was working on what she called “salary equity” for county employees, which led to wage increases.
There was also the Safety, Accountability, Fairness and Equity-Today law, known as the SAFE-T Act, which, among a number of provisions, eliminated cash bail in Illinois. In recent years, the law has prompted criticism from Kane County public safety officials about the increased staffing and operational costs they’ve been hit with as a result of the law’s stipulations.
Moreover, Hopkinson pointed to inflation as another source of increased costs. On the flip side, she noted, inflation has also increased the county’s sales tax revenue, though she noted that that is a less predictable source of revenue than, say, property taxes.
Now, despite the newly-passed budget for next year, just how the county will rebuild its reserves does not appear to be certain at this point.
“The way that you grow your reserves is you don’t spend as much as you take in,” Hopkinson said. “Think of the reserves as your savings account. If you spend your entire salary for an entire year … you’ll still have the same amount of savings. If you … take in your whole salary, but you only spend half, well, you have more … savings.”
As of August, she said revenues were trending higher overall, and the county is slightly below on spending, meaning its general fund balance could be higher than it is now by the end of the year.
But there are still unexpected circumstances that can arise, she said, like the settling of a union contract, which could bring with it costs in the form of increased and retroactive pay.
Bill Lenert, a member of the Kane County Board and the chair of its Finance Committee, emphasized that increasing the general fund’s reserves requires revenue, which is “very limited right now.”
And board member Verner Tepe, who has also been part of the county’s budgeting efforts in recent years, emphasized that the “key thing” is having a balanced budget, so that the county doesn’t have to worry about the general fund dipping even lower.
As far as the county’s revenues, one component of Kane County’s financial picture is its prior freezing of its property tax levy. Fiscal year 2025 was the first in many years that the county opted to raise its levy except to account for new construction. The board is capped at how much it can raise the levy each year.
Figures from county financial documents indicate that the amount the county has brought in from property taxes for the general fund has only increased by a little over $1 million since 2019, whereas the revenue some other taxes have brought in has increased significantly.
On the revenue side of things, Lenert said the county is expecting to have some “modest increase(s)” in some areas in the future, and will be eliminating some of its debt.
In addition to raising the property tax levy, the county has also opted to do other revenue-generating measures to resolve some of its budget woes, like reallocating some of its mass transit sales tax funds away from transportation costs and capital projects toward public safety and judicial costs and hiking its motor fuel tax.
But perhaps its most significant attempt to generate more revenue — a 0.75% sales tax referendum question — was overwhelmingly shot down by voters last year. If approved, the measure had been projected to bring in over $50 million annually.
The funds were slated to go toward public safety, which is where the majority of the county’s dollars go.
More than half of the county’s almost $128 million in spending out of its general fund in 2025, for example, went toward the Sheriff’s Office, State’s Attorney’s Office and court services, according to county financial documents.
Lenert told The Beacon-News that the 2025 ballot measure’s failure “sent a message” that voters “didn’t like the way (the county was) spending or using their tax dollars, and we needed to show them that we could be more responsible.”
Tepe echoed a similar sentiment.
“If you’re going to come to me as a taxpayer and, and say … ‘I need more money,’” Tepe said, “I think you need to be able to justify it. And I don’t think … when this was done a couple years ago, that that story was really told well.”
Lenert said he thinks that, given the prior referendum question’s overwhelming failure, the chances that a future one would pass is “rather remote.” But the recent years’ cuts, he thinks, are a “positive” should the county go for another ballot measure.
“I think what you have to do in order to pass any referendum is you have to educate the public on exactly what’s going on,” Lenert said. “And the education now is that we’re trying to be fiscally responsible.”
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That the county showing the public it can pass a balanced budget may be a step in the right direction for a future ballot measure was also floated by board member and the Finance Committee’s vice chair Jarett Sanchez at a recent meeting.
Another ballot measure is not definite at this point, but Lenert acknowledged that it’s still on the table.
But, in the meantime, the county has other finance-related matters to look at, both Lenert and Tepe indicated.
Tepe said one area he wants to address next year is how the county will fund needed work on its aging buildings.
“Now that we have done a better job of preparing the budget, we need to start coming up with some kind of an effective capital plan,” Tepe said.
Another short-term focus he thinks is a priority is better “managing the budget” — meaning greater accountability regarding departments and offices not going over the budgets they’ve been allocated for the year.
Lenert, meanwhile, said it remains a focus of the county that its employees are compensated “fairly,” and that they have good benefits. However, he noted, employee health insurance costs are increasing, and that may be something the board looks at going forward to further cut costs.
That’s something the board has already begun to address — in July, they narrowly voted to remove coverage of weight-loss drugs from employee plans starting in 2027.
Also on the topic of county employees, Lenert noted that a major reason the board passed next year’s budget well in advance of the start of the fiscal year was so county department heads and elected officials had time to prepare for any changes they’d need to make in advance to stay within their 2027 budget numbers. According to Lenert, that’s part of the board’s goal of the county not needing to let go of or fire any staff for budgetary reasons, but rather to allow its workforce in the different departments and offices to be reduced, if needed, by way of attrition.
That doesn’t mean next year’s budget is set in stone, however. Tepe acknowledged that the county will likely still need to be “fine-tuning” aspects of it going forward.
And, while the county has gotten the budget passed and met its goal of not further spending down its reserves, much remains to be seen.
“We’re kind of taking it a day at a time right now,” Lenert said.