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Springfield presents balanced preliminary 2026 budget, warns reliance on income tax remains a risk
Summary
Finance Director Katie Evanston presented a preliminary 2026 budget showing $61.3 million in General Fund revenue, an $88,000 projected surplus and staffing reductions; officials said a timing shift in income-tax remittances and one-time transfers helped close a prior $6.9 million gap but underlying pressures remain.
Katie Evanston, the city's finance director, told the Springfield City Commission that the city is presenting a balanced preliminary budget for 2026 after a year of difficult choices and targeted cost reductions. "Even with those challenges, we were able to deliver a balanced budget for 2026," Evanston said during the staff presentation.
Evanston said General Fund revenues for 2026 are projected at about $61,300,000 and General Fund expenditures at roughly $61,200,000, yielding a small $88,000 surplus for the year. She emphasized that most of the year-over-year revenue increase reflects a one-time timing change tied to the city's transition to a regional income-tax collection agency (which remits on the first of the month), not new economic growth.
The budget process began in April with a tax-budget revenue forecast, Evanston said, and departments submitted 2026 expenditure requests in late August. A projected $6.9 million operational gap at the start of the process was closed through targeted operational efficiencies, a voluntary separation incentive program (VSIP), reductions in transfers from other funds, and use of an accrued benefit liability fund to offset certain retirement costs.
Key figures explained to commissioners include: - Projected General Fund revenue: about $61,300,000 (a reported increase of roughly $5,700,000 over the revised 2025 budget; Evanston said most of that increase is timing-related). - Projected General Fund expenditures: roughly $61,200,000. - Projected 2026 General Fund surplus: $88,000. - General Fund reserves projected at the end of 2025: $5,600,000 (9.5%); projected for 2026: 9.3% (the Commission's target is 10%). - Citywide full-time positions reflected in the budget are reduced from 595 (2025) to 568 (2026); within the General Fund the change is from 288 to 261.5 FTEs.
Evanston warned the commission that those actions included largely one-time solutions and transfers from other funds (for example a $1.2 million transfer from the Permanent Improvement Fund), and that ongoing pressures remain. "This timing change is the only reason the year over year income tax numbers appear higher. It is not new growth and will not repeat," she said.
Evanston also highlighted utility and regulatory pressures outside the General Fund: the sewer enterprise faces substantial debt service tied to the U.S. EPA combined sewer overflow mandate (including projects she described as approximately $60 million and $23 million), and the commission has legislated annual sewer and water rate increases to support required investments.
The full 2026 preliminary budget and presentation will be posted on the city's website, Evanston said. The commission did not adopt the budget at the meeting; the document was presented and moved through the required public-review steps, with a first reading for appropriation ordinances included on the agenda.
