IL: Kane County Board considers allocating money away from transportation to public safety as budget woes continue

Debate about how to close a multimillion-dollar budget shortfall next year continues in Kane County, as the board considers diverting some sales tax revenue from funding transportation to public safety costs.

Among other cost-cutting and revenue-generating ideas that have been floated in recent months, this idea being proposed at the county board level involves changing how revenue from a sales tax levied by the Regional Transportation Authority is allocated in the county.

The RTA sales tax is a tax that helps fund public transportation in Cook and the collar counties. Currently, the RTA collects a 0.75% tax in Kane and the other collar counties, of which one-third is distributed back to each county, where it can be used for transportation and public safety, according to past reporting.

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 went to public safety and judicial safety funds, the county’s Finance Director Kathleen Hopkinson previously said.

The proposed change would mean increasing the allocation of the sales tax revenue to the county’s general fund by 25%, and decreasing the allocation of that revenue to the transportation sales tax fund by 25%, according to the proposed agenda item. That would mean half of the county’s RTA sales tax revenue would go toward public safety and judicial costs — 35% for operating expenses, and 15% for capital projects. The other half would still go toward transportation costs and capital projects.

The reallocation would be for one year, board member Michelle Gumz said at a recent Executive Committee meeting.

The reallocation alone would not close the county’s budget gap, but is one suggestion being proposed by a working committee dedicated to proposing ways of addressing the county’s budget shortfall, according to Kane County Board member Bill Lenert.

The working group is developing several budget cut and funding-related options it plans to present to the Finance Committee, board member Verner Tepe said at a meeting last week, but Lenert said some kind of reallocation of RTA sales tax money is included in all of the options.

The county has been facing a budget shortfall, which it has been solving by dipping into its cash reserves. For example, last year the county used over $27 million in reserve funds to pay for expenses in its general fund, according to Hopkinson.

One possible solution to the looming budget gap was a referendum question that would have increased the county’s sales tax by 0.75% to pay for public safety expenses, a measure that was projected to generate more than $50 million in revenue annually. But Kane County voters overwhelmingly shot down the measure in the April 1 election.

Now, the county is left with a budget shortfall Kane County Board Chair Corinne Pierog has previously estimated as being in the range of $25 million to $29 million, and it is on pace to dip below the required 90-day reserves in 2027 if revenue and spending remain level, according to past reporting.

Since the failure of the referendum question in April, the Kane County Board has been discussing how it will close a multimillion-dollar gap in the county budget for the next fiscal year, with suggestions ranging from an attrition program to fee increases to outsourcing county services.

Board members discussed the RTA sales tax reallocation at its most recent Executive Committee meeting on July 2, during which Kane County Director of Transportation Mike Zakosek outlined the potential impact on transportation.

Zakosek said there is a preliminary list of 19 transportation projects that would get tabled if the funds were transferred, some of which have already begun.

“You can’t put a project on the shelf and pull it back off the shelf very easily,” Zakosek said.

He noted that this sales tax reallocation would reduce the county’s transportation expenses to primarily maintenance, traffic operations and asset management, and would keep them from adding new projects.

Kane County Board member Bill Roth asked about the status of current projects and how much has already been spent on them, which Zakosek said he could provide to the board.

Transportation reform has been a major topic of conversation in the county as Chicago area transit agencies, like the county, also face an impending budget gap, one that was not filled by Illinois lawmakers before they adjourned their spring session.

Amid concerns about a fiscal cliff that could result in significant service reductions, Kane County officials emphasized their interest in reforming the region’s transit governance model to give the suburban counties more influence in decisions going forward — and noted the possible impact of losing the RTA sales tax revenue on public safety.

But, as the Kane County Board debates how to use that revenue, some board members nodded to the county’s transportation needs also.

“Transportation touches every one of us,” said board member Deborah Allan at the Executive Committee meeting on July 2, suggesting that transportation needs to remain a priority in the county even in light of its budgetary concerns.

Board member Clifford Surges suggested that he needed more time to review the transportation projects that could be cut, and asked if the matter needed to be voted on at that meeting.

Ultimately, the board voted to bring the matter off of the consent agenda and to the full board meeting on July 8 for discussion. But, at that meeting, board member Leslie Juby asked if the board would consider postponing the vote until the other budget-related proposals were presented, and the board agreed to table the item until its Aug. 12 meeting.

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