Staring down a multimillion-dollar shortfall for months, the Kane County Board recently passed an almost $409 million budget, using about $6 million of its dwindling cash reserves to balance it.
The budget that was ultimately passed, however, includes shrunken allocations for county departments and offices, and shifts in revenue sources.
One of those moves was an almost $7 million cut in funding for transportation in favor of public safety spending, by way of reallocating some of the Regional Transportation Authority sales tax funds the county receives. It was shortly after followed by a hike in the county’s motor fuel tax to replace that lost revenue.
Now, the Kane County Division of Transportation, or KDOT, is determining how it will modify its planned maintenance and roadwork projects, stabilized with funds from the gas tax hike but still anticipating a significant shortfall in the coming years.
The RTA collects a 0.75% tax in Kane and the other collar counties, one-third of which is distributed back to each county for it to spend on transportation and public safety, according to past reporting.
In fiscal year 2024, Kane County received just over $26 million in RTA sales tax funding, almost $20 million of which went toward transportation and the rest to public safety and judicial safety funds, the county’s Finance Director Kathleen Hopkinson has said.
Over the summer, the county board opted to decrease the allocation to transportation by 25%, meaning the funds are evenly split between public safety and transportation expenses. That left KDOT with almost $7 million less than it was anticipating for fiscal year 2026.
So, to replace that lost revenue, the county board in October voted to raise the county’s gas tax from five cents per gallon to eight cents per gallon, a move projected to generate more than $6 million annually once it goes into effect.
When the discussions started about diverting more RTA funds away from transportation, Kane County Deputy Director of Transportation Tom Rickert said it was initially expected to be “a pretty significant cut.” He said it was “pretty concerning,” set to create a $3 million shortfall annually for maintenance projects in upcoming years and scale back or stop altogether about 19 projects.
Now, the gas tax hike is set to fill much of that gap. But not quite yet.
The gas tax increase doesn’t take effect until July 1 because of when it was passed by the county, and the disbursement of that funding wouldn’t be until after that, Rickert noted.
“We still have a gap for next year, because we won’t start seeing those sales tax dollars (until July),” Rickert said. KDOT staff estimated that gap at around $5 million for fiscal year 2026.
In November, a few county board members, in a last-ditch effort, suggested allocating more reserve funds to transportation this year just before the budget was passed, expressing the opinion that KDOT was taking a greater hit from the budget cuts than other areas of the county government. But that idea ultimately failed to gain sufficient traction among the board.
Nevertheless, Rickert said that KDOT is in a better position than it was several months ago, with the additional gas tax revenue set to start coming in soon.
Board member Vern Tepe, who chairs the Transportation Committee, emphasized that the gas tax hike will largely replace the funds lost for transportation in future years.
He said he doesn’t think the funding loss will substantially affect KDOT’s projects, and that, though he stated he was reluctant to institute a new tax, he thinks the gas tax is a better source of funding than the RTA sales tax because the gas tax is locally controlled.
Part of the challenge with funding for transportation is that KDOT’s budget “flexes a lot,” Rickert said, because a significant portion of its budget is dedicated to projects, which vary from year to year.
Most of them are also long-term projects, and thus require funding over multiple years. KDOT has a five-year plan outlining its planned expenses and projects. The projects considered “Transportation Improvement Projects” make up by far the largest share of the annual budget, per the plan.
The department also has a map of its planned projects throughout the county.
Some of those plans will have to be adjusted in light of the current financial situation, Rickert said, to prioritize which projects the department can continue forward with and which ones it can’t.
“The last thing we want to do is start working on a project and … start spending monies and then five, 10 years down the road find out that we don’t have the ability to complete that project,” Rickert said.
KDOT is also reliant on securing grants to help fund its projects, but those typically require the county to put up funds of its own — making those funds harder to get as it receives less revenue from the county, Kane County Director of Transportation Mike Zakosek explained.
“Predictability is part of our challenge, too,” he said.
Zakosek and Rickert explained that they categorize the roadwork projects the department undertakes as primarily dealing with maintenance, safety concerns and increasing capacity on roadways.
Their first priority with projects is always maintenance, Zakosek said, followed by addressing safety concerns and improving areas where there are “hotspots” of crash reports. Capacity projects are typically the lowest priority.
They explained that KDOT typically doesn’t do capacity projects at all anymore because the funds aren’t available, largely for two reasons: increasing construction costs, and the nature of the projects being more complicated as Kane County continues to grow and become more urban. Capacity projects are also typically the most expensive to do, they explained.
“If we have to, maybe, delay the start of a project a little bit or do something, move things around a little bit, but that’s, that’s what we’re actively working on right now,” Zakosek said about the plans going forward.
For example, an expansion project at Randall Road and Highland Avenue in Elgin — slated to cost the county around $1 million — will likely not be pursued beyond doing engineering plans for lack of funds, Rickert and Zakosek explained. The eventual project would entail expanding the number of lanes and turn lanes to allow more cars to travel through the area.
A maintenance project at I-90 and Randall Road, however, would likely be a higher priority, on the other hand.
“We’re not going to be adding any new projects to our program at this point in time,” Rickert explained, “until we can handle the stuff that’s already on the list.”
But funding issues still may be felt down the line.
“We still have funding needs,” Rickert said. “We had the funding needs even before the RTA sales tax was reduced.”
The department is currently projecting an almost $15 million shortfall in fiscal year 2028 just from funding projects already agreed upon and doing needed maintenance.
Regaining some RTA sales tax funds could provide the department with additional cash, as the reallocation of the funds to help balance the 2026 budget was approved only for one year.
But that’s not a given, Zakosek explained, as the department plans projects stretching years into the future.
“We can only deal with what we have, what’s in front of us now,” Zakosek said. “And, right now, that money’s not coming in our direction.”
mmorrow@chicagotribune.com