Before McHenry County voters approved a quarter-cent sales tax increase to fund mental health services in a March referendum, officials estimated it would bring in about $1 million a month for the McHenry County Mental Health Board.
But when the first month of receipts came in earlier this month from the tax increase that took effect in July, the amount was just above $800,000.
County leaders now acknowledge they erred in projecting how much the sales tax would generate because they included revenue from car sales — but the tax doesn’t apply to car sales, per state law.
When the difference between the projections and the first month’s reality was discovered earlier this month, officials from the mental health board indicated they might need to cut back next year’s funding and deny funding to new programs, despite growing demand.
The board provides grants to local agencies that provide services to people with mental illness, substance use disorders and developmental disabilities.
County officials said Monday that, in part because of money they anticipate will be left over from this year’s budget, the mental health board is still expected to see a roughly $1 million increase in its county funding. County Chief Financial Officer Kerri Wisz said the mental health board is projected to end the current fiscal year on Dec. 1 with $11.1 million in reserves.
Some of that comes from the county’s 2024 property tax levy, the last to support the mental health board, since the sales tax was sold to voters on the promise that it would replace property tax funding.
Because of the five-month overlap of the two funding streams, county official said Monday the mental health board will bring in $24 million over the next two years from sales tax and property tax combined.
McHenry County Administrator Peter Austin said the sales tax is still a superior funding mechanism for mental health services in that it’s likely to continue to grow, and it gives the mental health board more autonomy from the county board.
Voters approved the sales tax in the March primary, with “yes” getting roughly 53% of the vote. With the referendum’s success, county board members said they will take out the mental health board portion of the county’s property tax levy. A vote on the 2025 levy and budget is expected in November, after the election in which half the board seats are up.
If the $805,000 generated in July by the new sales tax turns out to be the monthly average, the board could end up $2 million short next year, McHenry County Mental Health Board Executive Director Leonetta Rizzi said in a memo.
During a mental health board meeting last week, board member Mike Baber assessed the miscalculated revenue projection by saying: “In the private world, you’d be out of here so fast.”
“Somebody dropped the ball and it wasn’t us,” Baber added.
Despite talk of keeping the funding levels flat for 2025, the mental health board voted to approve grants that outpace the current year’s funding. But there will be another meeting Nov. 6 to finalize the budget, county officials said.
Democratic McHenry County Board member Kelli Wegener, who is running for county board chair against Republican incumbent Mike Buehler, sought to blame her opponent for the snafu.
“This was a calculation error made by the McHenry County Government. To date, we have not received any acknowledgment of this mistake nor a public apology from Mr. Buehler to the Mental Health Board,” Wegener said in a news release Friday.
Buehler responded that “one month does not a trend make” and said it is premature to pass judgment on the mental health funding program.