McHenry County moves forward in budget process without revenue from ICE contract

McHenry County officials are moving forward in crafting a budget for the upcoming year without as much as $10 million the county would have received from a contract with the U.S. Immigration and Customs Enforcement.

A lawsuit filed last month by McHenry and Kankakee counties seeks injunctive relief from the Illinois Way Forward Act, which requires existing agreements between the U.S. Immigration and Customs Enforcement and local jails in McHenry, Pulaski and Kankakee counties to end by Jan. 1. But in the meantime, county officials are planning for that money not being there.

“We’ve been told by the state’s attorney we may know late November whether or not the court has granted a stay,” County Administrator Pete Austin said at a budget presentation to the County Board last week. “Beyond that, it could be months, potentially a year, for the case to make it’s way through court.”

The counties argued in their lawsuit that the law interferes with their ability to work with the federal government and will cause them to lose revenue.

McHenry County began an agreement with the federal government in 2003 to hold federal detainees at the county jail. ICE pays $95 a day for each person in the county’s custody, county Chief Financial Officer Kevin Bueso said.

With the state requiring the agreement with ICE to end by Jan. 1, the county will still receive $368,000 from the federal government for holding 125 detainees in December, the first month of the county’s fiscal year, Bueso said.

Overall, McHenry County stands to lose out on as much as $10 million each year they received as part of the agreement. Bueso said McHenry County received $9.7 million in 2018, but income has dropped in recent years. He said the county planned on receiving $8.7 million this year, but has received only 34% of that so far.

“We are holding less people than previous years,” Bueso said in an email. “[Pre-COVID-19], the county was holding between 250 and 300 average daily detainees. After COVID-19, the number of detainees was below 100 average daily detainees. This was due to the impact of COVID-19 and how it impacted ICE operations.”

Increased revenue from income and sales taxes helped make up the lost revenue from the contract, Bueso said, but officials are considering a small property tax levy increase to shore up the county’s funds as well.

A bump in the property tax levy – the total amount the county collects in property taxes – was something the county was considering before the pandemic and before the forced end of the ICE contract, Bueso and Austin said, however, the contract’s potential end was one of the factors in the decision to ask the County Board for a levy increase this year.

“We wouldn’t be asking to raise taxes” this year if the county still had revenue from the ICE contract coming in, board member Mike Skala, R-Huntley, said last week.

Board member Jim Kearns, R-Huntley, also is concerned about the possibility of an “unfunded” mandate should the county still have to hold immigration detainees in federal custody after Jan. 1 because there is not yet another place for them to go but the county isn’t being reimbursed by the federal government for their stay.

“Local prisons and jails have people that should be in federal prisons, and they’re not moving them,” Kearns said.

Bueso said the county keeps track of its expenses and would work to recover the costs from the federal government should it incur additional expenses.

For some County Board members like Carlos Acosta, D-Woodstock, who pushed for the county to end the ICE contract before the state took action, losing the revenue isn’t overly concerning.

“In my opinion, it’s not bad at all,” Acosta said in an interview. “They’ve been wringing their hands [over] losing $8.5 million, and they’ve lost over $4.5 million this year. The loss of the contract is not going to have an impact, and they know there’s associated expenses that are going to go down.”

Acosta said the county has done a good job diversifying revenue steams and spreading them out to meet needs in different areas when revenue is tight.

Austin and Bueso acknowledged the county will not have the same expenses for the jail without the ICE detainees, so some expenses federal revenue paid for will no longer exist.

As for the county’s lawsuit against the state that seeks to allow it to continue its contract with ICE, Acosta isn’t worried the county will find itself in a situation unprepared to hold people in federal custody.

“I’m not an attorney, but I don’t know that it will go anywhere. Similar legislation has been passed in other states and has been passed in court, so there is a precedence out there for this type of action,” he said.

The final budget for fiscal 2022 will be voted on by the County Board in November.