Sales tax increase to fund mental health care? Question could go to McHenry County voters in March

Proposal would fund mental health board in lieu of property taxes, if voters OK change

The sales line on a receipt on Thursday, Nov. 30. 2023, at Kitchen Outfitters in Crystal Lake.

In addition to selecting nominees for president, McHenry County voters could face another choice at the ballot box in March: whether to raise the sales tax to provide funding for mental health services.

The McHenry County Mental Health Board voted this week to throw its support behind a proposal that could change how it’s funded. But it would also add another ¼ cent per dollar onto the sales tax paid for goods and services in the county.

The McHenry County Board would first have to sign off on placing the sales tax-increase referendum on the March 19 primary ballot.

If the measure goes to voters and they approve it, the referendum would shift much of the funding of the Mental Health Board from property taxes to a sales tax.

County officials estimate that the proposed quarter-cent tax increase on retail sales in McHenry County could bring in $14 million in revenue to the Mental Health Board, which in turn provides funding to many nonprofits that provide mental health services.

As for the potential effect on consumers, the total amount of sales tax they pay in the county varies depending on where the money is spent. In Crystal Lake, for example, the sales tax is 7.75%, which includes the state’s 6.25% tax on general merchandise, a 0.75% local sales tax and another 0.75% everyone in the county pays to help fund the Regional Transportation Authority.

If the new proposal is implemented, the sales tax in Crystal Lake would grow to 8%.

Sarah Halvorson, owner of Kitchen Outfitters  talks to a customer on Thursday, Nov. 30. 2023, at the store in Crystal Lake.

In the recently passed McHenry County budget – which included a small increase in the amount of property taxes the county will raise next year – the Mental Health Board share of that property tax levy increased $525,000 to almost $11 million.

That funding was a prominent point of contention of the county budget process in recent months. Organizations that receive money from the Mental Health Board have cited growing demand for services, staffing shortages and inflation as among the reasons they sought additional funding. The Mental Health Board originally had asked for a $2.5 million increase, nearly five times more than it ultimately received.

Some County Board members, many of whom are facing reelection next year, have been reluctant to raise additional taxes, especially after the board already approved a tax increase on gasoline that will go into effect Jan. 1.

Although the Mental Health Board got a smaller increase from the county than it sought for next year, Executive Director Leonetta Rizzi expressed gratitude for the financial boost at the board’s meeting Tuesday. The board endorsed the sales tax referendum at that meeting, with its members generally supportive.

However, the full County Board would have to vote to place the measure on the primary election ballot, and the deadline to do so is shortly after the new year.

Whether the general public and the business community would embrace a sales tax increase is less certain.

Darrin Flynn of D&A Salon | Apothecary on the Woodstock Square said he didn’t think the quarter percent tax would be a “dealbreaker” and cause people to shop elsewhere.

He acknowledged that taxes might not be popular and hoped the county had looked at other ways to fund the board.

“Sales tax is never a fun thing,” Flynn said.

Flynn added that Woodstock has a transient population and wanted the county to ensure the funding was going to those who need it.

“We need to be taking care of each other,” said Flynn, who also sits on the Woodstock City Council.

Wayne Read of Studio D Jewelers in Woodstock said he was concerned about the potential effects the tax could have on retailers.

“Retail is a tough business,” he said. “That small percentage can have a big impact.”

One concern of members of the Mental Health Board is that a switch to a sales tax-based funding model would not cover services for individuals with developmental disabilities. Rizzi said the board also wants to make sure it could fund all its services through the sales tax.

“We just want there to be some safeguards in place,” Rizzi said Thursday.

Mental Health Board member Carolyn Schofield said during the meeting this week that the decision to approve the sales tax was not up to the board.

“It’s up to the people,” Schofield said.

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