McHenry County Proposes Max Tax Hike

McHenry County residents will see their property tax bills rise under a proposed 2027 budget that relies on the maximum levy permitted by state law. The county board placed a $297.06 million budget and a $70.49 million property tax levy on 30-day public review on October 20. A final vote is scheduled for November 17, before the fiscal year begins on December 1.

The proposed levy is $2.8 million, or 4.1%, higher than the $67.7 million budgeted for the current year. This increase includes a 2.7% inflation adjustment plus taxes on new construction, which do not count against the state cap. The county stated that this levy represents the most the state’s property tax cap law allows. For an owner of a $350,000 home, the increase in the county portion of the property tax bill would be approximately $21.50.

County Administrator Scott Hartman told the board that the plan closes a $7.3 million deficit in the main operating budget. The county release notes the budget eliminates 15 positions and reflects other cost-saving efficiencies. To balance the books, the plan holds back $1.5 million in revenue normally used for building projects, shifts $1.4 million from a regional transportation sales tax to cover public safety costs, and uses interest earned on federal pandemic relief funds.

Hartman described the $2.5 million in interest revenue as a one-time source that will be depleted. The remaining gap is covered by expected increases in sales tax and court fees, higher charges to the county’s nursing home and 911 board, and a proposed hotel tax that still requires a separate vote. The final $110,000 comes from county reserves, leaving the county with less than the five months of reserves required by board policy by the end of 2027.

Several board members expressed reservations about the plan. Jim Kearns, a board member, stated he cannot support a levy increase that does not include spending cuts. He proposed using $1.4 million less of the one-time money and making up the difference with departmental reductions. Michael Skala, who has about a month and a half left on the board, called the county’s financial trajectory a free fall. He estimated the gap for the next fiscal year could reach $8 million or $9 million.

Mike Shorten said he did not think he could vote for a property tax increase without accompanying reductions. John Collins noted that $1.5 million in cuts would equal 12 to 15 positions. Pamela Althoff, chair of the senior services committee, warned that moving $250,000 from the voter-approved senior services fund into the main operating fund would reduce that specific fund by 12.6%.

Hartman told the board that expenses, including a $4.6 million increase in health insurance costs, have outpaced revenue. He said the board would have a detailed discussion at its November Committee of the Whole meeting. The draft budget is available on the McHenry County website.