Even if McHenry levies a separate tax for its Northern Illinois Special Recreation Association dues, the average homeowner could see a decrease in what is paid to the city, the McHenry City Council heard this week.

The Council got its first look at the 2025 levy on Monday. Finance Director Carolyn Lynch gave the Council three scenarios for levy increases – all of which showed that the owner of a $300,000 home would pay $20 to $30 less to the city in 2026 if approved.

McHenry has seen higher Equalized Assessed Valuations – the number used to determine how property is taxed.

“When EAV increases, property taxes generally decrease,” Lynch said.

McHenry’s levy has only been adjusted three times since 2010, Lynch said: It was decreased by 3% in 2016, increased by 2.6% in 2021 and increased by 1.2% in 2024.

“In real dollars, this means that the city has continued to operate with reduced revenue” while staff and purchasing costs have increased, Lynch said.

Costs the city is now facing include an extra $407,000 in mandated police pension contributions due to retirements, increased operational costs from inflation and union contracts, NISRA dues increasing by $32,000 over the next two years, $1.12 million in deferred capital project costs and the city’s share of Route 31 widening costs.

Lynch presented three options to the Council: increase the levy by the tax cap limit of 2.9% to bring in an additional $115,000 a year; raise the levy by 0.8% to capture new growth and $24,000 more a year; or create a new levy for NISRA to bring in $183,000 in new dollars.

While a vote was not held, a consensus of the board favored the NISRA levy option.

McHenry has been in the consortium that provides recreation for people with disabilities for several decades, said Bill Hobson, parks and recreation director. In 2023-24, the last year available, there were 62 McHenry residents registering for 480 programs, Hobson said.

“I have no problem with that levy,” 6th Ward Alderman Michael Koch said. “Whatever advantages this city can give these special needs people, I want them to have.”

Levying for NIRSA separately would not reduce the city’s general fund but would give the city a new way to pay for that service, Hobson said.

In 2025 tax bills, a house valued at $300,000 paid $461.14 of its annual property taxes to McHenry, Lynch said. With no levy increase – and no change to that home’s valuation – that number would be $431.20 for the 2026 tax bill, and with the NISRA levy, $447.70.

Not every McHenry Council member wants to see any addition to the levy.

“We are in a very good situation now ... and because we are in such good shape right now, I would like to leave the tax levy as is,” Alderwoman Chris Bassi, 4th Ward, said.

Earlier in the meeting, the Council heard the results of the city’s annual financial audit. The general fund – where property tax funds go – has an excess balance to cover 120 days of operations and more in the fund too.

Monies over that 120-day guideline will be transferred for capital projects – like the Route 31 reconstruction.

The Illinois Department of Transportation’s cost estimate for the Route 31 project is at $115 million, with the city’s portion about $7.3 million. Currently, McHenry has close to $7 million set aside, Mayor Wayne Jett said.

“I think it makes sense to use the new growth” number of 0.8% for the levy, said Alderman Andy Glab, 2nd Ward. “I’m willing to go with that.”

“It doesn’t increase the amount a resident will be paying,” Glab added, though he noted that could change if a home’s value increases.

A public hearing and final vote on the levy is set for December 15 City Council meeting.