Kane County is continuing work on its budgeting process for fiscal year 2027, with a measure passed recently by the county board set to reallocate some of the county’s mass transit sales tax funds as a means to help close an impending budget gap.
The measure, which continues a reallocation of funds approved by the board for its last budget, initially failed to secure sufficient votes from the board at a meeting last month, but was brought up again and received final approval Tuesday at the board’s monthly meeting.
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.
But, county staff has cautioned that doing so won’t be an option forever, and that the county must make significant cuts or find new revenue before 2027 to avoid dipping into its required 90-day reserves.
That’s left the board with the task of finding new revenue or cutting costs to avoid spending down its reserve funds.
One possible solution was a 0.75% sales tax referendum question, but that was overwhelmingly shot down by voters in 2025.
Last year, in the wake of the referendum question’s failure, the board took a variety of measures to close the gap, but ultimately ended up using about $6 million in cash reserves to balance its fiscal year 2026 budget. That amount, however, is down from about $27 million used to balance its budget the year prior.
The county board has since affirmed its intention to use little to no reserves to balance the fiscal year 2027 budget, tasking members with finding other ways to balance it.
One of these budget-related measures, however, has drawn some conversation among the board’s members: how the county will use its mass transit sales tax allocation.
The Regional Transportation Authority, or RTA, sales tax helps fund public transportation in Cook and the collar counties. 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, for example, Kane County received just over $26 million in RTA sales tax funding, of which almost $20 million went toward transportation and the rest to public safety and judicial safety funds. The following year, the county was allocated just under $30 million, according to a recent county presentation.
Last year, however, a measure passed by the county board increased what proportion of that sales tax revenue would go to the general fund so that half of the county’s RTA sales tax revenue was allocated for public safety and judicial costs, while the other half went toward transportation costs and capital projects.
But that reallocation was only for one year, meaning reallocations in future years would have to come before the board again for approval.
So, at its May meeting, the county board discussed a similar allocation for this year, but failed to approve it initially.
The proposal brought forward to the board last month stipulated that 35% of the RTA sales tax funds the county receives would go to its general fund for public safety operating costs, with 9% going toward capital projects related to public safety and 6% to capital projects relating to technology improvements for the judicial system. The remaining half would go toward transportation and transit project costs.
After the measure’s failure at last month’s board meeting, it was then brought forward again to the board’s Finance Committee, where it was recommended for approval, and then came to the Executive Committee last week.
At that meeting, there was some discussion among the board about why the matter was being brought up again, to which Kane County Finance Director Kathleen Hopkinson said it was a “reconsideration” to help the county balance its next budget.
Hopkinson said that the county’s current revenue projections, which are helping to enable the proposed fiscal year 2027 budget to be balanced, factor in 35% of the RTA sales tax revenue going toward the county’s general fund.
“If we don’t have that,” she said at the meeting, “you’re talking about cutting another $7 million … that would start dipping into cutting employees.”
But board member Clifford Surges indicated that the county borrowing from one fund is essentially the same as taking from reserves to close the gap.
“I’m confused on why the board is flip-flopping,” Surges said. “We were either impassioned and informed the last week, or we were ill-informed and there’s been a change.”
Also at the meeting, board member and Finance Committee chair Bill Lenert acknowledged that the measure had been voted down a few weeks back, but said several board members were not present for the vote and others were confused about what it entailed.
“If there’s as high as 40% of the board that either wasn’t present or didn’t understand the resolution, we should revisit,” Lenert said.
At last week’s Executive Committee meeting, discussion of whether to approve the measure continued, with some board members pointing to the loss of the funds for county transportation expenses, while others maintained the need for the reallocation to help balance the county budget.
Board member Deborah Allan said at the meeting last week that the county is “raiding” the funds that generally go to transportation costs in order to “artificially buoy up” judicial and public safety services in the county.
And board member Leslie Juby said she was “glad” to hear that the reason the measure was brought up again was to balance the budget, but expressed concern that the gas tax hike approved last year that was meant to make up for the lost funds to transportation is not going to make up the difference.
Board member Verner Tepe, however, defended the motor fuel tax hike as offsetting the RTA sales tax loss for the county’s transportation costs, and reiterated the county’s need for revenue.
“If we do not reallocate the RTA funds to the general fund, we will end up laying off people,” Tepe said.
“We’re not saying that this is going to please everybody,” Lenert added on the measure, “but we think it’s feasible.”
The matter was ultimately passed by the Executive Committee, with several board members voting against it, and it then came to the full board Tuesday for final approval.
But at Tuesday’s meeting, the same concerns continued.
Allan reiterated her opposition to the county “balancing the budget on the back of the transportation money,” noting that road projects can cost millions of dollars and take place over the course of years — so the RTA funds, she said, act as a “dedicated stream of revenue for the purpose of protecting all of the residents of Kane County by making sure that there is money available to improve (and) repair roads and, in some cases, take on new projects.”
“It’s bad management on our part,” Allan said, “to dip into one fund to cover another fund.”
Other members also expressed concern with the move.
“We can’t make this a regular thing,” board member Ted Penesis said Tuesday.
Penesis said that he would vote for the reallocation this time so the county can balance its budget even though he “(doesn’t) necessarily agree with this choice,” but said if the county keeps doing this, “it’s not a balanced budget as far as (he’s) concerned.”
Board member Michael Linder said, however, that the resolution on the table Tuesday wasn’t just for one year, but was to change the county’s allocation of the funds in general.
“We told people last year it was a one-year thing,” Linder said. “And now we’re saying we’re going to change the policy.”
Juby said that, though she supported the change last year, she wouldn’t support the reallocation this coming fiscal year. And Surges pointed to cuts to transportation work in his district, also suggesting that the change is not a one-time decision.
Board member Bill Roth pointed out that the gas tax hike — which was meant to replace the funds lost by Kane County’s Division of Transportation, or KDOT — doesn’t take effect until July, meaning transportation faces a “one-year lag” in funding.
“It is what it is, and there’s nothing we can do about it,” Roth said, “but to say it covered it all is false.”
But others remained supportive, indicating that the measure was needed to help the county balance its budget.
Board member Rick Williams, for example, acknowledged that it’s “never an easy choice” to choose between cutting people or cutting the transportation budget, but pointed to the county board’s recent history of dipping into reserves and said he has “no choice” but to vote in favor of this measure.
Board member Mavis Bates said that KDOT has been “completely taken care of in terms of replacement funds” and reiterated that balancing the budget is a “very important step” for the board.
According to Lenert, replacing the RTA sales tax with motor fuel tax funds to pay for transportation costs does leave a roughly $1 million discrepancy, but he also said that the county board is asking all departments and offices in the county to cut from their budgets.
“I don’t see where we’re asking transportation to do something that we’re not asking everybody else to do,” Lenert said.
The matter ultimately secured a majority of the board’s approval, with board members Allan, Juby, Linder, Roth, Surges, Mohammad Iqbal and David Young voting against it.
But, nevertheless, the reallocation doesn’t come without impact to transportation projects in the county.
At Tuesday’s meeting Kane County Director of Transportation Mike Zakosek explained that KDOT has, in recent years, identified a deficit expected in the coming years as it prepares its Transportation Improvement Program.
In addition to a decline over time in the share of the county’s RTA sales tax funding dedicated to transportation, Zakosek also claimed that long-term projections for revenue generated by the gas tax are flat or declining because of things like increased fuel efficiency in cars and the prevalence of electric vehicles. He also pointed to potential issues for county transportation projects with guaranteeing there will be the local funds needed to match grants or federal funding that might be received to help pay for these projects.
“The department at some point will feel the impact of the declining revenues,” Zakosek said. “And the only thing we can do is not do … some projects.”
mmorrow@chicagotribune.com
