Rockford considers cannabis tax revenue to address $3.7M budget shortfall

ROCKFORD, Ill. (WTVO) — The city of Rockford is facing a $3.7 million budget shortfall next year, and city leaders are considering using cannabis tax revenue to bridge the gap.

The shortfall is attributed to a decline in personal property replacement tax revenue, which had previously spiked to unprecedented levels. To address the deficit, city financial director Carrie Hagerty has proposed utilizing the city’s accumulated cannabis tax revenue, which is expected to reach $2.6 million by the end of the year, with an additional $850,000 anticipated in 2026.

“We have an accumulated balance that’s been unspent,” Hagerty explained. “We can use those funds. We can also use the revenue that we anticipate that we will collect in 2026.”

The cannabis tax funds Rockford’s Regrow Grants, which were intended as a way to reinvest in communities that were “disproportionality impacted by the war on drugs.” The money has been used in a variety of ways. Ranging from building renovations, recreational equipment, learning resources, and more.

Other options to address the budget shortfall include not filling current vacancies within the police department and increasing property taxes. However, these alternatives are less favored by some city officials.

Alderman Kevin Frost expressed his opposition to raising property taxes, citing his experience with the budget over the past 13 years. “I’ve been, you know, working with the budget now for 13 years. And in my time, we’ve not raised the property tax levy. I don’t want to do that,” Frost said.

Hagerty noted that using cannabis tax revenue would not impact current services or require tax increases. “Certainly because we’re not proposing tax increases. And it would not impact the services that we’re currently providing,” she said.

The first potential vote on the budget and property tax levy, which city staff aim to keep flat, is expected on November 10th.

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