Kane County to address budget deficit with tax increases, draining savings

Kane County is facing a $16 million budget deficit for 2022, and officials are planning to use federal COVID-19 relief money, raise multiple taxes and spend down the last of a savings account that staved off prior tax increases to address it.

Growth in the number of county employees will grow annual expenses by about $10 million if the county board approves all the requested positions and 2% raises. That's paired with about $6 million in revenue losses. Those losses are more on paper than in actual money as officials are diverting more of the day-to-day cash to address retirement and insurance costs.

"Sales tax, local use tax, RTA sales tax, state income tax and the personal property replacement tax are all doing much better than they were a year ago, and much better than the budget," said Joe Onzick, the county's CFO.

The county is also seeing new revenue streams from internet sales taxes and its own cannabis sales tax. All told, tax income is up by about $3 million for the current year and looking positive for the 2022 budget.

But it's not going to be enough to offset the county's growing expenses. For that reason, Onzick proposed trimming about two-thirds of the requested new positions, delaying raises until the county completes a comparative compensation study, and using the last $2 million in the property tax freeze protection fund.

Former county board Chairman Chris Lauzen led the creation of that fund, building off the property tax freeze put in place by his predecessor, Karen McConnaughay. The 2022 budget will be the first under the county board's new chair, Corinne Pierog.

Onzick also proposed using a total of nearly $9 million in federal COVID-19 relief money to balance the 2022 budget. That's a number that evoked both an endorsement and a word of caution from county board member Jarett Sanchez, who leads the committee overseeing the COVID-19 money.

"This money is going to evaporate at some point," Sanchez said.

He suggested small tax increases that keep county revenue on par with inflation is a better way to address the need for future revenue. He pointed to the county foregoing $100 million in property tax increases it could have approved over the last 10 years as evidence.

"When we pass that money up, it's not just the taxpayers saving money," Sanchez said. "It's the government the taxpayers have elected struggling to provide the services they expect from us."

The board must approve a draft of the budget at its Oct. 12 meeting. It must approve the final 2022 budget by Nov. 9. The 2022 fiscal year begins Dec. 1.