ROCKFORD, IL — Members of Rockford’s Finance Committee have agreed to a final 2025 budget appropriation amendment that draws down the city’s reserve fund to cover a $9.4 million shortfall.
Finance Director Carrie Hagerty said that although the city did a good job sticking to its $226.3 million spending plan in 2025, revenue from two funding sources underperformed.
The city got $6 million less than expected in revenue from its annual share of state taxes on corporations called the corporate personal property replacement tax. It also got about $6 million less than had been booked as receivables from ambulance transport fees as fewer Rockford residents could afford to pay for their ambulance rides.
Although those shortfalls were offset to an extent by other funding sources, the city is still taking a big hit to its reserve funds to cover it in 2026. Under city policy, the city should have at least 20% of expenses held in reserve but is expected to fall below that level this year.
Mayor Tom McNamara said he plans to form a financial task force to study city finances in order to come up with a balanced 2027 budget. In the past, such task forces have examined ways to improve efficiency, cut spending and raise revenue.
McNamara told City Council that unfunded state mandates have taken a toll on city finances. He also said that the state continues to keep a greater share of the city’s local government distributive fund — the portion of income taxes that return to the municipality. He estimates that the state has withheld a greater share of the tax since 2012, totaling an estimated $144 million or about three years worth of all property taxes that go to the city.
Ald. Chad Tuneberg, R-3, said the city is avoiding cuts this year by spending its reserves, but noted that cannot continue for long.
“We have been steadfast at keeping reserves, which is prudent because at times we have to dip into the reserve, Tuneberg said. “But there will be hard conversations coming to alleviate this from happening in the future.”
Jeff Kolkey writes about government, economic development and other issues for the Rockford Register Star. He can be reached via email at jkolkey@rrstar.com and on X @jeffkolkey.
This article originally appeared on Rockford Register Star: What’s behind Rockford’s budget $9.4M deficit and what lies ahead
Reporting by Jeff Kolkey, Rockford Register Star / Rockford Register Star
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