Aurora is facing a $29.7 million deficit in the 2026 budget’s general fund, city officials say.
That preliminary number, shared at a meeting with reporters on Monday, is based on early work city officials are doing to build next year’s budget. Not included in that nearly $30 million figure is the additional $10.3 million requested by departments as a part of the budget process, which officials say they still need to go through.
“We’re going to have, basically, some tough choices,” Aurora Chief Financial Officer Stacey Peterson said of the 2026 budgeting process.
According to Peterson’s presentation, the city is currently looking at a 2026 budget with $231.5 million in anticipated revenue and $261.2 million in anticipated expenditures. That’s specifically just in the city’s main operating fund, called the general fund.
Contributing to the projected budget gap is that several important funds were previously not being funded at the level they needed to be, according to Peterson. She said the city now has to put $3.3 million into the Compensated Benefits Fund, $3.8 million into the Property and Casualty Insurance Fund and $9.4 million into the Capital Improvement Fund, amounts taken out of previous budgets in an effort to balance them.
Not included in the nearly $30 million figure are any cost of living increases for non-union employees’ pay or any increases to contracts with various unions that are currently under negotiation, Peterson said. That number also assumes that Aurora will continue to collect the $4.5 million per year it gets from the 1% grocery tax, which the city is considering extending locally after it expires statewide at the end of the year.
The Aurora City Council is set to vote on the local extension of the grocery tax, and is expected to get a similar update on the city’s financial situation, at its meeting Tuesday.
To deal with the budget gap, the city may look to cut non-essential services, cut staff or stop previously-approved spending that was planned over several years, Peterson said.
Plus, Aurora Mayor John Laesch said the city is not going to be hiring any new employees, even for currently-open positions or positions that become empty when an employee leaves, unless first approved by his office. Already, his administration has chosen not to rehire for several key open positions, he said.
Staffing makes up a vast majority of the city’s expenses in the general fund, Peterson’s presentation showed. Since 2017, the city has increased its staff by roughly 30%, she said.
The city reduced its staff by four people last week, according to Laesch. When asked if more reductions to staff were coming, he said that “we haven’t reached that place yet.”
It is a bit early to be releasing these numbers to the public, and city officials have not yet been over every part of the budget, Laesch said at the meeting. However, not enough people believe there is a real problem with the city’s finances, he said.
Laesch has been talking about the city’s financial state since at least his inauguration speech in May, and he said at a town hall meeting last month that the city is facing a “significant hole” between revenue and expenses in 2026 based on early budget analysis.
At that meeting, he highlighted a number of causes for that gap as well as various ways his administration is working to close it.
Debt payments are one place where he said the city’s costs are going up. The city’s debt has now reached $327 million, Laesch said at the time, and so the city now has to spend an extra $7 million each year to pay that down.
The Aurora City Council has approved over $100 million in additional debt this year and late last year through the sale of bonds to finance construction projects from new fire stations to renovations at RiverEdge Park. Though some of the debt was taken out under Laesch, all of the projects to be funded through the bonds were approved by the Aurora City Council under former Mayor Richard Irvin.
The 2026 budget is also expected to see a $3 million to $4 million increase because of pay raises, partially because of some union contracts negotiated before Laesch took office in May, he said at the town hall last month.
Plus, this year, there have been a number of expenses and projects that were not included in the 2025 budget, he has said. One example is the $500,000 promised by the Irvin administration to VNA Health Care for opening its newest clinic, which the Aurora City Council approved last month despite concerns from some aldermen.
Aurora under the previous administration had also talked about funding the $7 million gap in the Aurora Civic Center Authority’s 2026 budget, which the Authority then planned around. That’s the organization that owns and operates the Paramount Theatre, Copley Theatre, Paramount School of the Arts and North Island Center plus manages the city-owned RiverEdge Park and Stolp Island Theatre.
The city under Laesch is now walking that back, and so the Civic Center Authority has put on hold the Paramount’s Bold Series of shows after the final performance of its current production at Copley Theatre in downtown Aurora. Depending on how much the organization ends up getting from the city, more cuts may be coming, Authority officials have said.
The municipal corporation did not receive financial help from the city until the COVID-19 pandemic, according to the organization itself, and the federal pandemic relief funds used to help the organization are no longer available. Laesch has said he is willing to work with the Civic Center Authority to find ways of making it financially sustainable and that he has offered a path towards giving the organization regular financial support.
To help ease Aurora’s projected budget gap, Laesch has canceled or cut back on various projects the city has previously planned on doing, he said at last month’s town hall. Examples include the proposed City of Lights Center project, which has been canceled, and the redesign of Millennium Plaza in downtown, which has been delayed.
Plus, Laesch has put in place tighter internal spending controls and has taken other steps to curb spending, including by going line-by-line through the budget to see what can be cut, he said at the town hall.
On the revenue side, the Aurora City Council recently voted to double the city’s hotel tax starting in the new year, the first time the tax has risen since it was put in place.
And as for the city’s property tax, Peterson said on Monday that it would likely be going up to pay for police and firefighter pensions and pay for the city’s debt service.
rsmith@chicagotribune.com
