Financial uncertainty looms over McHenry County as it plans how much to tax and spend

As the McHenry County Board starts to look at how much the county will tax and spend next year, the potential for additional federal cuts could shape what that looks like and is among the factors adding uncertainty to the process.

Although the budget and levy votes still are months away, the county is starting from an unenviable place, where expenses are expected to outpace revenue, even if the county takes the maximum increase it can. It’s a scenario that has raised the possibility of job or program cuts.

[ County Board delays vote on raises amid concerns about how to pay for them ]

And the prospect of federal cuts looms as governments reach the end of the Biden-era COVID-19 relief American Rescue Plan Act funds, which must be spent by the end of 2026.

In 2024, McHenry County spent about $25 million in federal grants, about half of which were ARPA dollars, McHenry County CFO Kerri Wisz said at a meeting in May.

Federal dollars fund a lot of programs and projects in the county. The Randall Road widening project has received millions of dollars in federal grant money, and ARPA dollars covered McHenry County’s contribution to keep Longmeadow Parkway toll-free. The court system also has received federal dollars, including grants for programs that identify defendants that might benefit from mental health services.

But County Administrator Peter Austin nodded to federal uncertainty July 10, saying that the county’s “relationship with the federal government is changing.”

And county officials said in June while discussing next year’s budget that federal tariffs had hit county projects in the facilities and transportation departments.

Some McHenry County communities have moved earlier on public projects to get ahead of the tariffs. McHenry purchased some light poles early in March to try to get ahead of tariffs that would have cost the city an additional $34,000. The pre-tariff total was $137,000. Woodstock got a new sound system for the Square in May for about $69,350; the tariffs would have cost the city another $5,000.

Wisz has said the County Board has asked about the effects of federal funding cuts, and the finance committee has broached potential contingency plans if federal funding gets cut off.

McHenry County and other governmental agencies in the county already have seen federal dollars rescinded, including the county health department losing a $600,000 respiratory illness surveillance grant earlier this year.

Changes also are expected as a result of the federal budget, the One Big Beautiful Bill Act, in the funding and amounts of Community Development Block Grants. That also could have an effect on county and local recipients.

During the July 10 meeting, Austin discussed a county goal as part of a new strategic plan to project finances three years out.

“Things are changing,” Austin said of the county’s financial landscape. “We really need to look at not only what gets us through the next 12 months, but what gets us through the next 36 months.”

Finance committee Chair Michael Skala, R-Huntley, asked in May about risk analysis, noting that there are people using county services who suddenly could be left “high and dry with no services. ... Going from something to nothing is a problem.”

But Skala also said he recognized that the county is financially limited in what it can do.

Board member John Collins, D-Crystal Lake, pointed out that McHenry County is in a blue state, and the county could be hit more than other places.

Although almost 84,000 voters, or almost 52% of the electorate, cast a ballot for President Donald Trump in McHenry County last November, Democratic candidate Kamala Harris received about 55% of the vote in Illinois.

As McHenry County moves toward the start of its fiscal year on Dec. 1, county staff will be coming up with various scenarios regarding what would happen to the county’s finances if the board chooses to reduce its property tax levy, keep it flat or raise it.

In the past couple of years, the County Board has approved small tax levy increases but not the maximum it could take. The votes have been narrow – 10-8 margins – but several Democrats who voted for those levies left office last year. Although five Republicans joined the Democrats to support the levy increase the past two years, the GOP expanded to a 15-3 supermajority on the board in the November election.

In an anonymous poll taken at a county meeting June 12, six board members expressed support for the 3% levy cut, but five wanted the board to levy for new growth and to increase the levy to account for inflation. Four members wanted only new growth, while two wanted to keep the levy flat with no new growth and no inflationary increase, and one wanted to max out.

At a County Board meeting in May, board member Terri Greeno, R-Crystal Lake, asked every governing body to try to lower its tax rates.

“Let’s all do our best in government to help the citizens of this county,” Greeno said.

After a property tax presentation that county Treasurer Donna Kurtz delivered in May, Greeno expressed an interest in taking a deeper look at taxation and ways to avoid increases.

“Something has to happen. You can’t keep cannibalizing the people who live here,” Greeno said.

Kurtz responded: “You can’t cut [taxes] so you can’t function, but you can cut to the greatest level of efficiencies.”