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Kane County finance committee hears warnings on declining use tax, balanced-budget resolution fails
Summary
Finance staff told the Kane County Finance and Budget Committee on May 20 that a January 2025 change in state law reduced taxable transactions and is likely to cut local use-tax receipts; the committee debated budget cuts and a resolution to reaffirm a balanced-budget obligation that failed on a tie vote.
Kane County finance officials told the Finance and Budget Committee on May 20 that a change in Illinois law that took effect Jan. 1, 2025 (Public Act 1030983) has materially reduced the number of transactions subject to the county’s local use tax and will likely reduce revenue by roughly $1 million or more in the current year.
Finance Director Kathy Hopkinson told the committee the Department of Revenue confirmed fewer transactions now qualify as use tax, producing statewide declines in use-tax collections; Hopkinson said Kane County’s local use-tax receipts have fallen sharply in recent months and the county may lose “probably a million or maybe more” this year from that single category. Hopkinson also warned that county cannabis tax receipts may be affected and said staff are still investigating monthly variance versus structural change.
Why it matters: The committee is drafting the fiscal 2026 budget amid an identified shortfall and calls from several members and public commenters for immediate expense reductions. Public commenters urged the board to adopt a 10% reduction target and to produce a monthly budget dashboard so board members and the public see department-level payroll, overtime and vacancy data.
Treasurer Laughlin told the committee the county has realized a large cumulative interest-income gain over recent years and provided figures to the committee packet. He said cumulative interest income for a multi-year span was about $45 million and cautioned that interest income is volatile and not a reliable long-term revenue source; the county’s investment manager projected $10–13 million of interest income next year with a working estimate of $10 million for the coming fiscal year.
Committee members and public commenters pressed for greater transparency. Several speakers, including public commenters Frank Esposito and Brian Anderson, urged immediate cuts and a publicly available dashboard of metrics (payroll, overtime, vacancy counts) to guide decisions. Board members discussed a working group (referred to in the meeting as a working group of finance staff and two board members) that will meet weekly to refine budget options and stressed the need to engage department heads on mandates and staffing choices.
The committee also debated a resolution titled “approval of balanced budget for Kane County fiscal year 2026,” which committee members described as a reiteration of the board’s statutory obligation to adopt a balanced budget. The resolution failed on a tie vote; committee members differed on whether the resolution’s language implicitly precluded use of reserves or simply restated the legal obligation to present a balanced budget.
Other operational items discussed: committee members asked about the county’s contract with accounting firm Lauterbach & Amen, which the finance director said is a one-year contract (effective mid-January) and has been providing monthly bank reconciliations, custodial account journal entries and other accounting support while the department pursues staff replacements. Hopkinson also told the committee the county will file an extension for the annual audit to complete outstanding items and expects to finish the audit in June.
The committee did not adopt the balanced-budget resolution; members signaled continued work through the finance working group and weekly meetings to refine cuts, examine mandates and produce more transparent budget reporting for the board and public.
