McHenry city officials blame Nunda Township for monopolizing property taxes meant for roads

The McHenry City Council claims the Nunda Township Road District is withholding money from the city through an obscure property tax practice, costing the city hundreds of thousands of dollars over the past decade.

The city last week passed a resolution asking state legislators to fix what McHenry’s elected leaders claim is an outdated law that lays out how township road districts must share property tax revenue with cities inside township borders.

Each year, township road districts levy property taxes for different funds. State law requires that a certain portion of one of the funds be shared with the city or village in which the taxpayer lives, while townships are given sole control over the other fund.

McHenry officials claim that over the past decade, Nunda Township Highway Commissioner Mike Lesperance, the head of the road district reelected this spring, lowered the tax collections for the road and bridge fund that the city is supposed to get a cut of. At the same time, Lesperance raised the levies for the district’s permanent road fund, which goes toward only the township.

The state law, city officials think, can give township roads too much funding from city residents who rely on the city, and not the township, for upkeep of the roads they use most often.

In 2010, Nunda Township road and bridge revenue, some of which is shared with the city, was $1.18 million, but it fell to $582,604 in 2019 even as property values were rising, according to city documents. At the same time, the permanent road levy, which is not shared with the city, grew from $1.98 million in 2010 to $2.34 million in 2019, the city said.

“McHenry’s residents have suffered with the reduction and stagnation of the shared General Road and Bridge Funds, while [the] township road districts’ residents have benefited with the continued increase of the Permanent Road Fund,” according to McHenry’s resolution, which adds the city would have seen about $230,000 more for its streets since 2015 without the reductions.

The taxing policy affects more than just McHenry.

Eric Dowd, who ran for highway commissioner against Lesperance in he Republican primary earlier this year and lost by 125 votes, made the declining revenues the Nunda Township Road District shares with cities and villages a central point of his campaign.

State law determines the amount of road and bridge fund revenue township road districts must share with local governments by multiplying the amount levied for the fund against the equalized assessed value of properties within municipalities, McHenry officials said.

Dowd’s calculations, based on records from the McHenry County clerk’s office reviewed by the Northwest Herald, show cities and villages within Nunda Township have seen about $860,000 less from the road district tax levy because of the reductions made from 2015 to 2019, compared with whether the levies had stayed at their average levels in the five years before 2015.

That includes about $271,000 more that could have gone to Crystal Lake, $112,000 for Prairie Grove, $102,000 for Island Lake, $66,000 for Oakwood Hills, $25,000 for Port Barrington, $24,000 for Bull Valley, almost $19,000 for Holiday Hills and $18,000 for Lakemoor, according to Dowd and McHenry County clerk’s office records.

“He’s trying to build a business out of a township,” Dowd said of Lesperance. “He has built onto the township road district exponentially.”

Lesperance did not respond to multiple requests for comment.

McHenry Mayor Wayne Jett threw his support behind Dowd’s unsuccessful election campaign in the February primary in part because of the city’s issues with Lesperance’s levies.

“City of McHenry residents are paying out all that money for roads, and here we are struggling to keep our streets and roads up to par, and we’re dishing out all that money to the township,” 2nd Ward Alderman Andy Glab said. “They can argue we use the township roads. The township people use the city roads just as much.”

McHenry’s resolution proposes several solutions. One involves Nunda Township raising the road and bridge property tax rate that the city shares to its earlier levels.

But absent action by the township itself, the city hopes state legislators can change the law so municipal governments can receive a larger portion of the road and bridge revenue. Or lawmakers could make it so township road districts also have to share the permanent road funds that they currently get to keep all of, the city of McHenry said.

Republican state Sen. Craig Wilcox, who represents the city of McHenry and Nunda Township, said he and his staff are working on a bill he plans to introduce in the next General Assembly session that would change how townships work in several ways, including by reformulating property tax sharing between road districts and cities.

“This is not a new issue. It has come up in the past. Certainly not with all townships, and with this one in particular, it seems to be a heightened issue,” Wilcox said. “I have a township bill that will attempt to address a number of issues, including the authorities for road commissioners. They are probably the closest thing we have in Illinois to kings, for lack of a better term.”

The other state lawmakers representing parts of McHenry and Nunda Township did not respond to requests for comment.