McHenry County shoppers, drivers to see higher taxes starting Monday

McHenry County shoppers will see a new 0.25% tax at the checkout line starting Monday.

The additional tax, which does not apply to items such as groceries or medicine, is earmarked for the McHenry County Mental Health Board. It replaces a property tax levy that previously funded the board.

During last year’s property tax and budget discussions, the Mental Health Board’s funding was among the larger sticking points. The board originally asked for a $2.5 million increase in its share of the levy, but the McHenry County Board ultimately approved a smaller $525,000 increase.

Mental health agencies in the leadup to the vote last year had advocated for increased funding to the Mental Health Board. Some providers said they had seen an increased need for mental health services and needed more funding to meet the need for those services.

Woodstock-based Warp Corps, which has retail operations and offers services focused on combating substance use disorder and homelessness, is a beneficiary of Mental Health Board funding.

“We were fully in support” of the sales tax referendum, Mutert said. He added that Warp Corps did their research on the topic before arriving at their opinion.

Now that the sales tax is set to take effect, Mutert believes “it’s going to be better for agencies.”

In addition to social services, Warp Corps is going to be affected as a retailer by the tax increase. Mutert said he is “not worried about that small increase.”

The funding that the organization has received from the Mental Health Board has allowed Warp Corps to expand street outreach programming and offer complimentary summer activities for young people, including disc golf and rock climbing outings.

“We’re definitely filling a need,” Mutert said, adding that those on the Mental Health Board, “are heroes in my book.”

Suzanne Hoban, executive director of Family Health Partnership, said she was “very excited about” the new tax. She felt the change would be a more stable source of funding.

“The need continues to grow,” Hoban said. “I am grateful to live and work in a community that values mental health.”

Officials estimate revenue from the new tax would be about $13 million, significantly more than the $11 million that was earmarked for the Mental Health Board in this year’s levy and closer to the board’s ask last year.

After last year’s budget vote, the County Board opted to ask the electorate if they wanted a sales tax or property tax for the Mental Health Board. Some of the members of the board at that time had expressed worries that a March referendum was too soon, and in January the county launched an FAQ page about the tax on its website.

In the weeks leading up to the vote, county leaders had vowed to remove the property tax levy if the sales tax passed, even though technically nothing was holding them to it.

The referendum passed with about 53% of the vote.

In April, after the election results were certified, the County Board lived up to its promise, repealing the property tax and formally levying in the sales tax.

Shoppers in other McHenry County municipalities will see some changes at the register Monday, as well. Crystal Lake shoppers will see an additional 0.5% in local sales tax, approved by the Crystal Lake City Council on Election night as voters approved the countywide sales tax. Crystal Lake officials said that tax increase is earmarked toward hiring more police officers and firefighters, while Marengo will start levying a 1% sales tax earmarked for road improvements in the city. In exchange, Marengo will drop its requirement for vehicle stickers.

Countywide, chambers of commerce leaders said they hadn’t heard much about the tax.

Brad Ball, president of the Woodstock Area Chamber of Commerce and Industry, said he hadn’t heard much chatter about the sales tax and the Chamber was trying to spread the word so businesses could update their systems and make any necessary tweaks before the tax kicks in.

Lynn Caccavallo, president of the Cary-Grove Area Chamber of Commerce said in an email: “The Cary-Grove Area Chamber of Commerce respects the recent referendum passed by McHenry County voters to increase the local sales tax by one-quarter (1/4) percent for mental health purposes, effective Monday, July 1, 2024. While we do not take a position on this specific measure, we remain committed to supporting our local businesses and advocating for policies that foster a thriving economic environment in our community.”

Molly Ostap, president of the McHenry Area Chamber of Commerce, said in an email to the Northwest Herald that she hasn’t heard any negative comments or concerns from local retailers.

“I think most residents and retailers understand the value of funding mental health. The tax is such a small increase (only an extra 25 cents for every $100 spent) that it doesn’t really impact consumers very much, but it will hopefully have a significant impact in providing and expanding services for people in need,” Ostap wrote.

Local retailers don’t appear to be worried about the tax increase.

Kristina Bates, one of the owners of Verdant Sol in McHenry, said while any tax increase is “awful,” she’s not losing sleep over this one.

She said the average sale at her store is $48, so the new sales tax is “not enough for the average customer to even bat an eye.”

Shoppers aren’t the only ones who will pay more for things starting Monday. Drivers filling up their gas tanks in McHenry County will pay an increased gas tax for the second time this year, although one increase came from the county and another is coming from the state. A McHenry County local gas tax increase took effect January 1, raising the county gas tax to eight cents per gallon. The Illinois statewide gas tax is increasing again July 1 to 47 cents per gallon, up from 45 cents.

Shoppers had mixed feelings about the taxes.

“All these taxes are a joke,” said Bill Morgan who lives near Crystal Lake, adding, “looks like it might be time to move.”

Todd and Kathy Swedberg also were displeased by the tax increases.

“Spending is out of control,” Todd Swedberg said.

Others felt more positive toward the tax.

John Fischbach of Cary said the money from the sales tax is going to a good place and tourists or people visiting the county and buying stuff are going to be helping out the Mental Health Board.

“I agree with that,” Fischbach said.