Equal Attention + Funding

The McHenry Downtown District has not paid their fair share of property taxes to the taxing bodies since 2002 and will not be required to pay their fair share of property taxes to the taxing bodies until 2037. This is because in 2002, the Downtown District was designated a Tax Increment Financing (TIF) district, the City’s only TIF zone. For reference, the Downtown TIF District encompasses a segment of land in the Downtown area, primarily encircling Green Street and Riverside Drive.

TIFs are a financing tool municipalities use to revitalize a blighted area of a City that would otherwise be impossible to rehabilitate. When a TIF zone is created, the base value of property within the TIF zone is locked in for taxation purposes. If a property is valued at $100,00 when the TIF zone is designated, $100,000 will remain the base property value throughout the entirety of the TIF period. This means that, irregardless of actual property value, the $100,000 base value is the dollar amount the taxing bodies will base their levy off of until the designated TIF period ends.

The properties within the TIF district are still subject to regular assessments, but, as their property values increase and higher taxes are paid, that difference does not go to the taxing bodies. Of the property tax money collected, over 80% goes to District 15 and 156 schools, with lesser percentages going towards the fire department, the library, the City, township roads…. The taxing bodies still receive their requested amount but it is without the fair contribution of the TIF zone.

So where does the additional property tax collected from the actual value over the base value go? That money goes into a Special Tax Increment Allocation Fund that can only be spent within the TIF district, either for public use or private use projects. Projects funded through the Special Tax Increment Allocation Fund are done so entirely with money that would have otherwise gone to the taxing bodies if the property was outside of the TIF zone. And that is why the Downtown District has not paid their fair share of property taxes to the taxing bodies since 2002.

The Downtown TIF District was set to expire in 2025 after the maximum-allowed 23 year designation. However, in 2022, the City approved a 12-year extension of the TIF district. Because of this extension, the TIF district will not be required to pay their fair of property taxes to the taxing bodies this year, but, instead, will now have through 2037 to keep the property taxes collected beyond the base value in the Special Tax Increment Allocation Fund.

Eligibility for a TIF district requires the presence of blight or the threat of blight due to building deterioration, inadequate utilities, excessive vacancies…. Additionally, TIF eligibility requires that development could not occur in the area without the incentive of TIF financing. When the Downtown TIF District was first designated in 2002, these eligibility requirements were, arguably, fulfilled. However, the current administration either has to legitimately believe that the Downtown TIF District was still so badly blighted in 2022 that it necessitated an additional 12 years designation OR the current administration needs to admit that this extension was abused for the purpose of keeping funds in the Mayor’s favored part of town.

This is a prime example of how attention and funding is not equal throughout the entirety of the City. It is also the reason why McHenry has such jarring contrasts between thriving areas and depressed areas.

TIF districts can be terminated prior to the designated end date provided all financial obligations related to the redevelopment are paid off. This is something the City should look into and prioritize. Additionally, any future TIFs should be decided by voters through a ballot referendum

McHenry has staff dedicated to attracting businesses to the City. However, the current administration has required an inordinate amount of staff’s time to be directed towards Downtown development. The City can create a more balanced McHenry where equal attention and funding is given to the entire town, not just Downtown, by redirecting focus to other parts of town, including the west end of IL-120 and the vacant storefronts along the north end of IL-31 (although we need to be realistic about the short-term economic viability of IL-31 due to extensive upcoming road construction by the State).

Equal attention and funding is also a major issue in regard to McHenry’s parks. From FY17/18 to FY24/25, aside from general maintenance and vandalism repairs, six City parks have received a one-time $2,800 or less in funding for improvements. These parks are Ward 1’s Liberty Trails Park, Ward 3’s Riverside Hollow Park, Ward 4’s Legend Lakes Homestead Tot Lot Park, Ward 4’s Malibu Playground Park, Ward 5’s Boulder Creek Park, and Ward 6’s Freund Field.

From FY17/18 to FY24/25, aside from general maintenance and vandalism repairs, six City parks have received $0 in funding for improvements. These parks are Ward 1’s Rotary Park, Ward 1’s Neumann Park, Ward 4’s Pheasant Valley Park, Ward 6’s Brookside Trail, Ward 6’s Millstream Subdivision Beaches, and Ward 7’s Cold Springs Park, McHenry’s largest natural park at 46 acres (read more about Cold Springs Park HERE).

In contrast, Ward 1’s Miller Point Park received $2,500,000 in funding in FY23/24.

It can be argued that the parks that get more funding are because these parks are used more.  But, I’d argue, these parks are used more because they are better-funded and given more attention to attract residents. One way to attract more residents to neighborhood parks is through spreading out activities across all parks. One example could be free weekly tai chi classes at rotating parks throughout McHenry in the spring through fall.

Equal funding would not mean the same dollar amount spent in every park since passive neighborhood parks do not require the funding that active parks require. However, when there are six parks that have received $2,800 or less and six parks that have received $0 over a seven year time period while another park received $2,500,000 in one year, that sends a clear message that your parks, and therefore, your neighborhoods are of little concern or value to the City.  A fairer allocation needs to be a priority so residents in all parts of McHenry have equal attention and funding and neighborhoods are more balanced.