McHenry County Board poised to pass balanced budget with levy freeze

WOODSTOCK – McHenry County government’s budget for next fiscal year is tentatively balanced, while keeping the County Board’s intent to freeze its tax levy and not collect an inflationary increase.

County Administrator Peter Austin told board members at a Committee of the Whole meeting Tuesday that the budget is not only balanced, but that the general fund could end with a $396,000 surplus. The county is on target to approve a finalized spending plan at its November evening meeting, just before the Dec. 1 start of the next county fiscal year.

“I’m feeling very positive about where we are in the process,” Austin said.

The tentative 2014 spending plan is what Austin called a “controlled growth budget” – general fund expenditures increase only two-thirds of a percent over the current fiscal year budget. The general fund budget does not include one new hire.

The Finance and Audit Committee is set to recommend the budget’s approval Oct. 8. It then would be put on 30-day review at the County Board’s night meeting Oct. 15, with ratification to follow Nov. 19.

The cost for McHenry County government makes up about 10 percent of a resident’s property-tax bill.

County Board members voted in June to reject the 1.7 percent inflationary increase to its tax extension it would be entitled to next year under the tax cap. Members chose last year to turn down the 3 percent increase the county could have collected on this year’s bills, citing struggling property owners irate that tax bills have been increasing despite the fact that home values have fallen. First-year growth – which has been significantly depressed since the bursting of the housing bubble – is not capped.

The tax cap law in place for more than 20 years has had an unforeseen effect since the bubble burst. When home values are rising, the law limits the increase that taxing bodies can receive over the previous year to either 5 percent or the rate of inflation, whichever is less. But when values fall, a scenario state lawmakers never envisioned, the tax cap ensures that governments receive the inflationary rate if they so choose.

Should the surplus end up $396,000 as projected, Austin cautioned against the board spending any more than $200,000 on supplemental expenses requested by departments.

The 2013 budget approved in November was for $250 million, a $6.7 million decrease from the 2012 budget. McHenry County government is one of three Illinois county governments with a top Aaa bond rating from Moody’s Investors Service.

While the county budget is almost complete, the board’s Public Health and Human Services Committee in late August created a stumbling block when it rejected the 2014 budget for the Mental Health Board. While the Mental Health Board has significant spending autonomy under state law, the County Board must ultimately green-light its budget.

A joint meeting is scheduled for Tuesday between the public health committee and the Mental Health Board Finance Committee to work out differences.

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