ROCKFORD, IL — Rockford agreed to spend down its reserve funding to close a $9.4 million 2025 revenue shortfall and avoid any cutbacks or service reductions.
But the measure may only be a temporary reprieve as Mayor Tom McNamara plans a task force to study city finances.
City Council on June 15 approved a measure that would cover the shortfall by spending down what is sometimes called the city’s “rainy day fund,” a reserve of cash held in case of unexpected expenses or revenue shortfalls.
City officials said that although the city stuck close to its $226 million spending plan last year, two revenue sources fell short of expectations in 2025 by about $12 million combined. Those shortfalls were offset somewhat by greater than expected collections from other sources.
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. Corporate taxes are a volatile funding source that can swing up or down each year. The city relies on statewide forecasts to budget for it.
It also got about $6 million less than expected in ambulance fees as fewer residents had insurance needed to cover the cost of ambulance rides, officials said.
City Council voted 11-0 to approve a supplemental appropriation ordinance which means the city will cover the shortfall utilizing city reserves. The city had a $46 million reserve fund at the end of fiscal year 2024, the last time it was reported.
McNamara plans to form a financial study group. Members of City Council, department heads, city staff and representatives of the city’s largest labor unions could be asked to look for ways the city can operate more efficiently, save money, cut expenses and generate additional revenue.
Its work could potentially mean recommendations for service or staff reductions, tax or fee increases or measures that improve cost effectiveness.
Rockford scraped $2.6 million from its marijuana sales tax fund before approving this year’s budget to help close what was a projected $3.7 million deficit in 2026. Some aldermen had objected, arguing that money was meant to be used on programs benefiting those most negatively impacted by the nation’s war on drugs.
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: Rockford will cover $9.4M budget shortfall by spending down reserves
Reporting by Jeff Kolkey, Rockford Register Star / Rockford Register Star
USA TODAY Network via Reuters Connect
By Jeff Kolkey, Rockford Register Star | USA TODAY Network
