Sales tax switch creates funding shortfall for mental health services in McHenry County

For some clients of the Association for Individual Development, having access to the nonprofit’s help can have life-or-death stakes.

“These are really important services,” said Lore Baker, president and CEO of AID, which works with people with developmental, physical, mental and other challenges in the Northwest and West suburbs.

But now Baker’s worried that AID won’t be able to meet the needs of those in McHenry County who rely on its services.

According to county records, the organization received about $100,000 less this year in funding from the McHenry County Mental Health Board, down from $345,725 to $245,000. Those funds help cover things like psychiatric services and a certified recovery support therapist.

Baker attributes the drop to the county’s new quarter-cent sales tax for the mental health board generating less revenue than projected — the result of what McHenry County officials acknowledge was an error on their part.

AID is one of about 30 agencies and social-service nonprofits that rely in part on the revenue.

AID was part of a broad coalition that advocated for the countywide sales tax, which voters approved last year. But so far, the revenue has been about 20% below the approximately $1 million per month estimated by the county.

That estimate had a mistake baked into it: It was assumed that the tax would apply to auto sales, which turns out not to be the case, per state law.

Another agency that has receives funds from the mental health board is Clearbrook, which provides services to people with developmental disabilities. Emily Fencl, the organization’s vice president of program services, said the mental health board funding is key to supporting the McHenry County residents Clearbrook serves.

The shortfall has forced the mental health board to tap into its reserves to fund operations, board officials said, and has even prompted talk of going back to voters for another sales tax increase. It’s far less certain the county board would support another such effort.

The mental health board allocated just over $10 million for 2025. Because of the financial uncertainty, the board did not fund any new agencies this year, according to records. While some agencies did get a little more funding for 2025, several others, including AID, Rosecrance, Pioneer Center for Human Services and Northern Illinois Recovery Center, will receive less.

Mental health board officials sounded the alarm at meeting in December that the board’s cash flow was less than its monthly expenses.

Board member Lindsay Keisman, who leads the finance and audit committee, said it would be a “shame” for the board not to consider another referendum.

Mental health board Executive Director Leonetta Rizzi said the current situation — using reserves to support operations — is not sustainable.

“We are now using reserves to subsidize our budget as a temporary solution before we are forced to make cuts to providers in the future if another referendum isn’t supported,” Rizzi wrote to in her November board report.

She also wrote that it now appears that the board might not reach its pre-sales tax funding level of $11 million until 2028, “which is not guaranteed.”

Rizzi wrote that an analysis found the board needed at least $15 million in funding for fiscal year 2025, excluding strategic initiative funds.

County leaders have said they plan to work with the mental health board staff to develop and refine a new financial model. Any supplemental funding from the county would be a county board decision, McHenry County Chief Financial Officer Kerri Wisz said.