Generous raises granted in collective bargaining contracts such as those negotiated for police and firefighters, coupled with a rise in headcount and increases in pension costs, threaten to push the city toward a fiscal cliff in three or four years, Springfield’s immediate past budget director says.
Without tax increases or cuts in services, the city’s path under Mayor Misty Buscher and the Springfield City Council is unsustainable and could exhaust the city’s current estimated $71 million in reserves by 2029 or 2030, Bill McCarty told Illinois Times.
“There is an enormous structural deficit, and the longer they wait to address it, the harder it will be to fix it,” McCarty, budget director for 12 years under former mayors Mike Houston and Jim Langfelder, said after being contacted by the newspaper.
Buscher and her budget director, Ramona Metzger, disagreed with McCarty’s characterization of the situation as a structural deficit, though Buscher said a subset of city spending – state-mandated police and fire pension payments – will create major funding problems for the city and other Illinois municipalities if not addressed soon by state lawmakers.
“Apparently, he has a crystal ball, because he’s saying we’re going to be out of money,” Buscher said of McCarty’s assessment of city finances. “Without pension reform, he’s not wrong, but I don’t think he’s painting a clear picture.”
McCarty responded: “I am not guessing to come to my conclusions. I’m using the administration’s own numbers.”
The council held budget workshops to discuss various departments’ budgets before a Feb. 10 public hearing on the fiscal 2027 budget and potential final passage on Feb. 17.
No new taxes
McCarty’s concerns about the budget pertain to the corporate fund, which pays for most functions of city government, but doesn’t include City Water, Light and Power, for which a $323.6 million budget is proposed in the next fiscal year. He said he is focused on overall city spending, not just public-safety pension obligations.
“Police and fire pensions have always been a concern,” McCarty said, “but the city gets annual actuarial analysis to know what’s coming in future years. It’s not a surprise. You have to plan for it well in advance. That is the primary reason we worked so hard to increase the city’s fund balance to provide that cushion for future years. Now it’s being spent down on operating expenses, and you have no more cushion for future pension increases or economic catastrophes like the Great Recession that occurred around 2009.”
Buscher said the spending in her administration’s proposed $201 million corporate fund budget for the fiscal year that begins on March 1 – amounting to a 7.5% increase over current year spending – is necessary, justifiable and affordable.
At the same time, the mayor said she has no immediate plans to propose that the council adopt a local grocery tax in place of the statewide 1% grocery tax the state eliminated on Jan. 1. The loss of that money will mean about $5 million less for city coffers on an annual basis.
Buscher also has no plans to propose an increase in the city’s share of the property tax rate. The rate hasn’t increased since the mid-1980s and stands at 93.8 cents per $100 of assessed valuation, which works out to about $625 a year for a $200,000 home.
Springfield’s property tax rate is lower than the municipal rates for Bloomington, Champaign, Decatur, Normal, Peoria and Urbana.
If Springfield raised its rate to the average rate for those six other communities – $1.33 per $100 of assessed valuation – the resulting increase would generate $11.5 million more annually, according to Buscher’s budget director, Ramona Metzger. Such an increase would boost the property tax bill for a $200,000 home by about $260 per year.
Because Springfield is a home-rule community, the City Council could raise property taxes regardless of the tax increase restrictions that Sangamon County adopted in the late 1990s and that govern other taxing bodies in the county.
“We’re not close to bankruptcy,” Metzger said. “There are things we could do if we had to do them.”
Jeff Egizii, the budget office’s fiscal services assistant director, added, “There are a lot of expenditures that could be delayed or cut.”
Buscher isn’t proposing any tax increases because she said she doesn’t want to put more burdens on citizens, especially after two years of water rate increases amounting to a compounded total increase of 74%.
Police and fire costs increase
Buscher, 55, the former elected city treasurer, was endorsed by the city’s police and firefighter unions in her successful bid to deny Langfelder a third consecutive four-year term for the nonpartisan mayor’s job in 2023.
Buscher said she resented McCarty’s implication in public statements that unionized police officers and firefighters didn’t deserve the raises negotiated in contracts with her administration and approved by the council.
McCarty, 50, a Springfield resident who ran unsuccessfully for city treasurer – Buscher’s previous job – in 2023, currently works as chief financial officer for the Illinois Board of Higher Education. He said he has no plans to run for mayor or another city office in 2027.
McCarty said he isn’t arguing that the multi-year, total 21% pay increases for police that were granted in 2023 and the pay and mandatory staffing increase for firefighters approved in 2025 after binding arbitration were unneeded.
The police contract was projected to cost the city an additional $12 million or more through February 2026, and the new firefighter contract is expected to cost a similar amount over the next four years.
“What I’m saying is, if you look at it from a pure black-and-white number standpoint, the city will have a hard time affording that,” McCarty said.
In addition, the city’s state-required funding for police and fire pensions used to be covered by the city’s share of property taxes. But pension payments began to exceed the city’s property tax revenue about a decade ago.
In the next fiscal year budget, the city will need to use $5 million more than the $28.7 million it expects to collect in property taxes to cover police and fire pension obligations. The amount city government will need over and above its property tax revenues for police and fire pensions is projected to double in the next five years unless changes in the funding formula are approved by the General Assembly.
Using reserves to balance the budget
Buscher’s proposed corporate fund budget in the next fiscal year would use about $24 million from the current fund balance – one-third of the total – to balance the budget. The city would spend another $27 million of the surplus in the fiscal year that begins March 1, 2027, according to the administration’s projections. But Metzger said the city may not end up using that much of the surplus in either year because the city projects its revenues and spending conservatively.
The city’s projected headcount of 1,498 employees in the next fiscal year includes an increase of 84 employees. Almost half of those increases would be represented by increases in sworn police officers and firefighters.
However, not all of those hires may take place, Egizii said. Even in the current fiscal year, there are 38 vacancies for non-CWLP jobs, he said.
The budget for the current fiscal year called for the use of $14 million from the surplus, but none of that money ended up being needed. In fact, $3.2 million was added to the end-of-year surplus because of a combination of higher-than-expected revenues and unfilled positions, Egizii said.
Metzger noted that the city soon could see large increases in sales tax revenues associated with tourism as the Scheels Sports Park at Legacy Pointe becomes fully operational.
McCarty acknowledged that the amount designated for spending from surplus funds may not be needed in the next year or two. But the fact that the administration is budgeting the potential use of $24 million in the next fiscal year and $27 million in surplus funds the year after that “all points to a major structural deficit,” he said.
Ward 10 Ald. Ralph Hanauer, 65, has commented in the past about the city’s surplus funds dwindling. He said at a council meeting last year that he was relieved he will complete his third and final four-year term in 2027, before city finances could become more problematic.
But Hanauer defended the pay increases approved by the council, especially for the police department.
“We’ve had to raise salaries to keep people,” he told Illinois Times.
When asked whether he’s worried about the surplus being exhausted, he said, “I’m keeping an eye on it.”
Hanauer said it’s inappropriate for a former city budget director to weigh in publicly on the current administration’s budget decisions. Surplus funds were used when McCarty was budget director, Hanauer said.
“I think it’s ill will,” Hanauer said.
McCarty disagreed and faulted council members for not asking hard questions about the future.
“I spent 12 years of my career rebuilding the city from virtual bankruptcy after the Great Recession,” McCarty said. “When I left, it had record reserves. I can’t sit by and watch all of that be destroyed in a matter of three or four years without saying something. I’m also doing this because I’m a citizen of the city, and I care about what the future looks like. … The plan is clearly to deal with this coming fiscal crisis after the next election.”
Buscher said she is fundraising for a potential campaign to win a second term but hasn’t yet committed to running again.
This article appears in January 22 – 26, 2026.
Ward 10’s Ralph Hanauer has once again been caught in his own web of lies.
He calls himself a budget hawk, careful with spending, but that all changes when it comes to his favorite special interest groups that keep his campaign coffers full.
Now he wants to split city maintenance into three departments, each with its own boss and staff, effectively tripling the payroll, all while griping about long repair wait times.
Has he noticed that many parts take weeks to arrive?
Tax-and-spend Ralphy not a tax or fee increase he won’t for, 2 SIXTY SIX% water rate increases thats has made cost of of living sky rocket in Springfield !
He’s the water boy for the county government, sending our city tax dollars to them whenever he can.
I’m looking into opening a So mali daycare here in Springfield. It’s a great business model!