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City presents FY2026 budget preview, flags sharp drop in replacement-tax revenue
Summary
Finance director Scott told the City Council that personal property replacement tax receipts have fallen sharply from 2023 peaks and that the city is projecting lower revenues and making expenditure and capital timing adjustments for FY2025 and FY2026.
The City of Bloomington Finance Director Scott told the City Council on the evening the city is projecting a significant falloff in personal property replacement tax (PPRT) receipts and is adjusting both projections and planned capital spending for fiscal 2025 and fiscal 2026.
Scott said the city budgeted $4.2 million for PPRT in FY2025 but is now projecting roughly $2.7 million for the year after a series of downward revisions in state-distributed estimates, and staff are proposing a preliminary FY2026 PPRT projection of $2.5 million. "We started the year with a budget of $4,200,000 and we're projecting now based on the IML information that we received 2,700,000," Scott said during his presentation.
The projection lands amid other revenue pressures the finance director highlighted, including a roughly $481,000 shortfall in state sales-tax receipts year-to-date and a persistent negative variance in the local motor fuel tax. Overall revenue for the general fund is running below budget and Scott said staff are planning expense reductions and delays to preserve reserves. Among the adjustments shown in the financial exhibits are equipment delays, lower transfer-outs for capital projects and postponement of a planned fire land acquisition.
Scott walked council members through historic PPRT volatility: the city saw replacement-tax receipts spike to more than $6 million in FY2023, then fall to about $4.2 million in FY2024 and now to a projected $2.7 million for FY2025. He described the spike as partly the result of a Department of Revenue over-allocation that local governments and the Illinois Municipal League have been tracking. "There was a lot of discussion... the Department of Revenue was over allocating to the PPRT fund," Scott said.
On expenditures, Scott said the city is forecasting higher salary-and-benefits costs this year (partly from lower vacancy savings and recently settled union agreements) but is identifying offsets including delayed capital spending and reductions in outside purchases; the revised projection shows year-end reserves of about $36.8 million for the general fund. Scott also summarized enterprise funds, noting solid waste’s year-to-date position is improving as encumbered landfill fees are realized, while the golf fund’s revenues remain weather-dependent.
Council members asked no substantive follow-up questions during the presentation. City Manager Jeff and other staff directed residents to the budget books posted online for deeper detail. The presentation served as a preview for the formal FY2026 budget process, with staff indicating further council sessions on the proposed budget to follow.
What happens next: staff will continue monthly revenue tracking and incorporate updated IML and Department of Revenue guidance into the FY2026 draft budget. The council will receive further budget documents and exhibits in upcoming meetings for review and formal approval actions as scheduled.
