ROCKFORD, Ill. (WIFR) — The City of Rockford faces a multi-million-dollar budget cliff, as officials work to balance next year’s finances without increasing property taxes.
A proposed 2026 budget shows a shortfall of $3,686,447, potentially marking Rockford’s first deficit since 2022. On October 20, Finance Director Carrie Hagerty presented a proposal to council members featuring $221.5 million in revenue and $225.2 million in expenses.
Hagerty attributed the deficit to rising pension contributions—expected to increase by $5.3 million, or 15%—and state tax distribution changes. Four days later, Hagerty spoke with WIFR to discuss possible options to eliminate the deficit.
Rather than increasing taxes, Hagerty proposed lifting restrictions on how the city’s cannabis sales tax revenue is used. Repurposing it could provide Rockford with $2.6 million in one-time revenue and an additional $850,000 annually for the general fund.
“Our proposal is instead of increasing our property tax levy or cutting services, let’s redirect those funds to help pay for current costs,” Hagerty explained. She described the next Rockford budget as “status quo,” meaning no services or programs would be cut.
Budget Battle in Rockford
In 2020, city council members placed guardrails on the 3% cannabis retail sales tax. “That money was intended for the underserved,” said Ald. Gina Meeks (D-12th Ward). The tax currently funds the REGROW Grant, a program supporting community initiatives like the Booker Washington Community Center, Discovery Center Museum, and YMCA.
Meeks argued that Rockford’s cannabis tax should maintain its original purpose.
“That cannabis fund, in my opinion, has an intention, and it should not be touched,” she insisted.
Another recommendation being considered involves revisiting Rockford’s vacant property fee structure, which could bring in an extra $210,000 annually. Meeks said she plans a 12th Ward meeting to get resident feedback on how to best balance the budget.
Ald. Chad Tuneberg (R-3rd Ward), however, supports using the cannabis tax to close the gap. “I get asked frequently, what is the city doing with the cannabis money?” he said. “When we have a budget shortfall, we have to start looking—where are we going to get that money?”
Tuneberg argued that Rockford should use existing cannabis funds rather than leaving police positions vacant or raising property taxes. “We have plenty of social programs in Rockford. Why not use that cannabis tax to shore up the shortfall so we don’t have to sacrifice public safety?”
A final budget presentation and vote are expected when the Rockford City Council reconvenes in early November. Hagerty hopes for passage before Thanksgiving, though the budget isn’t officially due until March 31, 2026.
