A taxpayer-funded nursing home in one of the nation’s highest-taxing counties has amassed tens of millions of dollars in reserves and local officials are now looking to send part of that back to taxpayers.
The Valley Hi Nursing Home in McHenry County is actually a taxing district, taking about $40 annually from each property taxpayer there. Not counting federal money it gets for care, the facility has amassed reserves of more than $40 million, enough to run operations for four years.
McHenry County, in northern Illinois, has had an annual property tax burden as high as four percent of a home's value, most recently 2.82 percent in 2017, according to ATTOM Data Solutions. That's higher than others around it and among the highest as a ratio of home values in the nation.
County Board Chairman Jack Franks, D-Marengo, plans to take about $8.8 million of that reserve and distribute it to property owners – a $100 check per owner.
“This is an affront to the taxpayers,” he said. “The resolution that I’m advancing is to give some of that obscene reserve back to the people who paid it.”
County board member Donna Kurtz, R-Crystal Lake, agrees with Franks that taxpayers deserve lower taxes, but said the 120-bed nursing home taxes about $40 per taxpayer, where local school districts are taking thousands for schools with shrinking enrollment.
“The real focus should be the bloated and extraordinarily high school tax levels,” she said, adding that the $40 million is in an account with federal funds that can’t be given away.
There are guidelines for some types of local government to limit the accumulation of large reserves, but set laws do not appear to exist, specifically for a taxpayer-funded nursing home.
Townships, for example, are recommended to have six months worth of operating revenue in reserve, according to the Township Officials of Illinois. Court cases have capped reserves at 200 percent of expenses over the last three fiscal years.
“Almost all of them do it,” Franks said of taxing bodies in Illinois. “When I served in the General Assembly, we saw a lot of local governments that were amassing surpluses five times their annual budgets.”
Franks and the board cut the county government's property tax levy by about 11 percent last year. Franks said he plans to cut another 15 percent in 2019.
Should the checks be sent out in late February, as Franks intends, it would come as McHenry County holds its consolidated primary election, scheduled for Feb. 26. Franks’ term doesn’t end until 2020.