With inflation at a 40-year high and new expenses being handed down from the state, McHenry County faces an exceedingly tight budget for 2023.
To remedy any shortfalls, the McHenry County Board is expected to vote on a possible property tax increase in November to make up the gaps. But whether that increase will pass is still up for debate, said board member Michael Skala, R-Huntley, who chairs the county’s finance committee.
If the proposed property tax is approved, a household paying $7,000 total in property tax every year would see the county portion of its bill go up by about $14, County Administrator Peter Austin said at the county’s Committee of the Whole meeting in September.
With the Nov. 8 election, every County Board seat is up. Its 24 members will be reduced to 18 when the new board sits for the first time in December. The county’s new fiscal year begins on Dec. 1.
Throughout the election cycle, several candidates on the board have pledged to vote against any possible property tax increase. The vote for the new tax levy is on Nov. 15, one week after the election.
This year’s budget calls for about $261.5 million of expenses and revenue, county documents show. The county has balanced its budget, except for questions remaining in its general fund, which is expected to have about $92.3 million in revenue.
Last year, the budget minus the general fund came in at about $130.8 million. This year, that number is up to about $171.4 million, most of which can be attributed to $50 million for the Randall Road south project, documents show.
About $1.2 million in new requirements from the state are set to be tacked onto the new budget as well, county documents show.
Almost all of it is tied to the state’s new Safety, Accountability, Fairness and Equity-Today Act, or SAFE-T Act, which eliminates cash bail and mandates body cameras for law enforcement, along with changes that creates new staffing needs.
The McHenry County State’s Attorney’s Office has asked for a new attorney to manage content captured from body cameras, county documents show. Two new lead investigators were also requested. They would be tasked with issuing summons to witnesses or defendants needed in court, along with also reviewing body camera footage.
The last item is for a new public relations specialist, documents show. McHenry County State’s Attorney Patrick Kenneally said at the Sept. 29 meeting that his office currently has nobody in this role, adding he thinks the criminal justice system and his office have done public relations “very poorly.”
“The PR person in the office is me,” Kenneally said at the Sept. 29 meeting. “I can assure you I do not have the time.”
The McHenry County Sheriff’s Office, in addition to needing money for its body camera system, asked for one new staff member to help manage the body cameras and two new social workers, county material shows.
With these changes, the county’s estimated budget for its general fund, which covers its day-to-day operations, show that if the county were to not take any tax increase, there would be roughly $3 million shortfall when everything is totaled up.
To help make up that shortfall, a property tax increase, which would capture a total of about $500,000 in new growth and nearly $1 million in money through inflation, could be approved.
If both pass, it would raise the levy roughly 2%, Skala said.
County Board member Kelli Wegener, D-Crystal Lake, said earlier in October she is having a hard time with taking the nearly $1 million inflationary increase. There are other things the county can do to cover the difference, she said. One area she would trim is some of what the State’s Attorney’s Office is requesting.
“Everybody’s having a really hard time,” she said. “We expect a recession, and we don’t want services to go down. We don’t want to hurt the people who need the most support.”
Three other recommendations are also on the table, totaling another $2.5 million, which several board members voiced support for at previous meetings.
Those recommendations include removing about $475,000 to fill vacant positions in county staff, with the hope that it could slow down hiring in the next fiscal year, county documents show. There are currently between 46 and 60 vacant positions across the county.
Another $500,000 will come from the Valley Hi Nursing Home reimbursing the county for its information technology services, which in the past the county has covered, Skala said.
The largest financial recommendation is using $1.4 million of funds from the American Rescue Plan Act as a one-time expense to help fund two government building projects, according to a presentation given at the county’s Sept. 29 meeting.
County Board member Jim Kearns, R-Huntley, pitched at the meeting taking more from that fund to plug the hole completely. He also supported raising the county’s motor fuel tax rate rather than raising property taxes.
“Every single school district, police, fire department, they’re going to take [the maximum tax increase],” Kearns said.
The county received nearly $60 million as part of the federal government’s American Rescue Act Plan, with about half of that set to go to the county and the other for public programs, such as grants to organizations. To pay for those two new projects, that amount allotted to the public would be reduced. The county has about $15 million in funding still unclaimed, Austin said in September.
Skala said on Thursday he felt confident that the board will also pass the $500,000 increase tied to new growth, but was unsure if the $990,000 tied to the rate of inflation would also pass.
Last year, the board passed its budget but did not pass the tax levy increase, leaving a gap for county staff to fill.
This year, in the case that the board doesn’t agree to the $990,000 increase, Skala said the county is working on a list of about $2 million in expenses. If the vote fails, board members will have to choose roughly $1 million worth of expenses on the list to cut in order to balance the budget.
That list is not yet finalized, Skala said.
Higher inflation this year creates an opportunity to raise revenue, which could help balance future budgets as well as the current one, Skala said. That isn’t something that comes along every year.
Passing up on those opportunities now could lead to the county being limited in its ability to raise revenue, which could lead to cuts in future years to make up that gap, he said.
“What I was cautioning the board on is when you look at [revenue streams], you have to understand there are only so many opportunities you have in order to pull revenue to balance a budget,” Skala said.