ROCKFORD, Ill. (WIFR) – The City of Rockford faces a multi-million dollar budget cliff.

A proposed budget for 2026 shows a shortfall of $3,686,447, which could be the city’s first deficit since 2022.

On October 20, finance director Carrie Hagerty presented council members with a proposal that featured $221.5 million in revenue and $225.2 million in expenses.

Hagerty blamed the deficit on growing pension contributions (expected to increase by $5.3 million or 15%) and changes in how the state disperses tax revenue.

Four days after the presentation, Hagerty sat down with WIFR to share what options members can consider to wipe the deficit clean.

“The mayor and this administration has focused very heavily on keeping property taxes flat,” she stressed.

Rather than hike property taxes, the recommendation shared with council members is to lift restrictions on how the city’s cannabis sales tax revenue is used; repurposing it would bring $2.6 million in one-time revenue and supply $850,000 annually into the general fund.

“We’ve accumulated a balance and we will have revenue going forward,” Hagerty held. “Our proposal is instead of increasing our property tax levy or cutting services, let’s redirect those funds to be used to help pay for current costs.”

Hagerty describes the next budget as “status quo” – meaning no services or programs would be affected. Since Illinois law requires communities to balance budgets, the deficit must close somehow.

Budget Battle

In 2020, city council members put guardrails on the 3% cannabis retail sales tax.

“That money was intended for the underserved,” Ald. Gina Meeks (D-12th Ward) insisted. “These are real dollars that are hitting our community and making real impact.”

In a city hall conference room, Meeks defended the cannabis sales tax’s original purpose. The fee funded the REGROW Grant, “an equity-driving, restorative justice and community reinvestment grant program.“

The investment offered hundreds of thousands dollars to various projects across the community – like the Booker Washington Community Center, Discovery Center Museum and YMCA.

“That cannabis fund, in my opinion, has an intention, and it should not be touched,” maintained Meeks.

The city’s kept property taxes relatively flat for 12 years; Meeks adds she doesn’t wish to break that streak, but her fellow leaders should search for other budget solutions.

“The investment that we’ve been making into this community is all for nothing because we’ll just wipe it out by filling a gap and then subsequently taking all of that funding each year as a suggestion.”

Another recommendation tied with changing the cannabis tax includes revisiting how Rockford charges vacant property fees – potentially collecting an additional $210,000 each year.

Meeks believes leaders should take a step back before finalizing any budget.

“What we need to focus on is what are our priorities?” she contended. “We need to start from a zero-balance budget and start from scratch to know exactly what our immediate needs are, and then everything else should come back to council.”

She mentioned plans for a 12th Ward meeting to ask constituents how they feel the budget should be balanced as well.

“I just want to have that opportunity to really look at any other alternatives before we go straight to underprivileged communities.”

Bring in the Green

Ald. Chad Tuneberg (R-3rd Ward) suggests repurposing the cannabis tax could provide easier answers for his constituents.

“I get asked frequently, what is the city doing with the cannabis money?“ He argues the best move forward for the council is to rewrite restrictions on the weed fee.

“When we have a budget shortfall, we have to start looking. Where are we going to get that money?”

Other options floated by Hagerty to members included increasing the property tax levy to the maximum allowed under Property Tax Extension Law Limit; that would raise $1.8 million. Another includes keeping vacant positions open – generating $2.1 million but leaving 19 patrol spots empty, following new hires in December, within the Rockford Police Department.

“I will not leave open positions in our police department when there’s cannabis money,” Tuneberg declared.

He also pushed back against Meeks’ defense of the REGROWTH Program.

“We have plenty of social programs in Rockford. Many of them even overlap,” Tuneberg said. “Why not use that cannabis tax to shore up that shortfall so we don’t have to sacrifice public safety? We don’t have to sacrifice public works projects.”

A budget presentation and vote will return to Rockford City Council in early November. Hagerty hopes for passage by council members before Thanksgiving; the budget isn’t technically due until March 31, 2026.

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