The City of Bloomington’s projected budget for the 2026 fiscal year shows a citywide decrease of $21 million, including a $9.4 million drop in the general fund.
Those reductions of more than 6% each from the previous fiscal year were among the figures shown to the city council during a preview of the $310.6 million spending plan at Monday night’s Committee of the Whole meeting.
City manager Jeff Jurgens said the finance department and city department heads have been working for several months to minimize a sizeable projected deficit and arrive at a balanced budget.
“We said we need to be extremely conservative. We need to tighten our belts, provide a very conservative budget for us to review. They did that,” said Jurgens.
While it’s still considered “balanced,” the budget includes a deficit of $5.7 million. The total general fund figure stands at $133.7 million, and spending on capital projects totals $77.2 million — a decrease of $11.3 million [or 12.8%] from 2025.
Although the picture may appear gloomy, finance director Scott Rathbun said there’re no reason to be overly pessimistic.
“The city, we're in a good position. I mean, we have a strong local economy; there's a lot of development [and] we have Rivian and Ferrero,” said Rathbun. “We're just having to deal with a couple of adjustments that occurred over the last year. Get some visibility, discuss alternatives and keep moving forward with that goal of continuing to deliver the services that the community needs and deserves, making life better, and being good stewards of the taxpayers’ dollars.”
One of the ways the city intends to tighten the books is through staff reductions by attrition, with 12 full-time positions likely to be cut. Rathbun said he wasn’t yet prepared to publicly disclose where those positions would come from when asked by council member Mollie Ward.
“I would like to know what those numbers are before we, I guess, agree to a budget,” said Ward. “I'm hearing from people in my neighborhoods, real concerns about certain departments being expected to do more with less, and they're not liking the outcome.
“They're seeing certain departments stretched very thin and feel like it's showing. So I'd like to be able to have wide open eyes about what it equals when we start to make cuts like that.”
Part of the budget crunch stems from a $1.3 million drop in projected tax revenue. Rathbun said based on the 2025 budget, they would’ve assumed a typical increase of 2% across the board related to inflation.
“So really, when you're looking at a $1.3 million reduction in [revenue], it's probably a $2.5-$3 million swing from year to year,” he said.
A detailed update on capital projects in the 2026 budget will be presented at next Monday’s council meeting. The presentation of the proposed budget is set for March 10, with a public hearing expected on March 24 ahead of final budget adoption on April 14.
Housing rehabilitation programs
The other presentation during Monday’s meeting examined the possible implementation of programs to rehabilitate Bloomington’s housing stock, a priority approved by the council last July.
“We are really looking at taking a multi-pronged approach to neighborhood revitalization within the community, that being: city Investment, community investment, and also outreach and education,” said Community Impact and Enhancement Director Melissa Hon.
Hon, who is leaving the Bloomington administration at the end of the week to become Decatur’s assistant city manager, said the city already has allocated more than $1 million in American Rescue Plan Act [ARPA] investments toward various housing rehabilitation projects, along with nearly $100,000 for lead hazard reduction.
She said the first city investment proposal would be to establish an exterior repair and improvement program with an annual budget of $160,000-$200,000.
“Really, what we are looking to do is to help fill the gaps of the current programs that we have and really help amplify the property improvement within the city. So, we would propose that these would be owner-occupied units within the regeneration area,” said Hon, adding the program could be used for repairing and replacing roofs, gutters, siding, driveways and walkways and other improvements for households at or below 80% of the average median income.
Another possible program would go for minor home repair and improvement, again for households with lower incomes.
“Eligible work would be replacement of defective water heaters, HVAC, mobile home roof repair, accessibility ramps, radon mitigation testing,” she said. “Once again, this would really help us to fill a gap that we can't really meet with our federal and state fundings, especially with the mobile homes because they don't own the land.”
A topic that prompted discussion among council members was how to handle abandoned properties. Hon said available census data from 2023 estimates Bloomington has 929 such properties.
“Something that I've been asking for months and months and months is to get some more information about how we can begin to incentivize people to redevelop those abandoned properties and those neglected properties,” said Ward.
Jurgens told Ward that state law prevents the city from imposing any “vacancy” taxes on the abandoned properties, but an alternate option could be to use a tax freeze as an incentive to motivate owners to not allow a property to deteriorate.
“We've already had some preliminary conversations, and so that's something that's being discussed and could be another program that gets rolled out to help with that,” he said.
