Local News

Bloomington and Normal join McLean County in suggestion they back away from legal cliff and restart talks in sales tax dispute

WGLT | By Charlie Schlenker

Published December 5, 2025 at 2:06 PM CST

an aerial view of a Government Center building in Downtown Bloomington — Property owners in McLean County recently began receiving notices of values, the first step in the property tax cycle.

The latest missive on the dispute between the City of Bloomington, Town of Normal, and McLean County over how the county government handles shared sales tax money includes a vigorous defense of previous allegations against the county and proffers a reciprocal olive branch.

In a letter dated Nov. 26, the town and city enlarge on a previous McLean County government call to resume discussions rather than move forward in court.

Background

Sales tax money the town and city have shared with the county is supposed to go for behavioral health, jail expansion debt service, and information technology upgrades used by public safety agencies. Quiet discussions on how to revise a decade-old intergovernmental agreement began nearly a year ago and collapsed into a public standoff during the summer.

The breach widened in autumn with a formal notice from the town and city that the county had defaulted on the agreement. The county’s response denied the allegations and offered an olive branch, calling for new talks. You can find previous WGLT coverage of this dispute and related issues at the bottom of this story.

Newest letter

The city and town have now responded to the county response. In the document acquired under a Freedom of Information Act request, the municipalities expand on the county's call for new negotiations. It puts talks in the hands of the city managers and county administrator.

“We recommend structuring this work similarly to collective bargaining, where tentative agreements are documented as consensus is reached, and then submitted to the Mayors and County Board chair for review and sign off to indicate their personal support,” said the letter.

The city and town councils and the county board would need to approve a final pact to resolve the disputed violations and include revisions to the original intergovernmental agreement [IGA].

The most recent county letter offered one such change to the agreement — an 18-month pause in collection of shared sales tax revenue while other issues are worked out, coupled with an extension of the agreement identical in duration to the pause. That differs from a previous city and town proposal that would have paused sharing, but not extended the agreement. The county had called that idea a cut, not a pause.

County Administrator Cassy Taylor, Bloomington City Manager Jeff Jurgens, and Normal City Manager Pam Reece observe construction on the downtown Bloomington Streetscape Project.

The new city and town document also has language that suggests a willingness to back away from a legal precipice that could involve a jump into court.

“This initiative was created in the spirit of cooperation and shared purpose. Our three governments launched this effort together because we share the same goal, improving mental and behavioral health outcomes for residents across McLean County. That shared mission remains as important today as it was when the IGA was adopted,” wrote the city and town.

In a perhaps not unrelated instance of bonhomie, a recent LinkedIn post showed a smiling selfie of city managers Pam Reece and Jeff Jurgens and county administrator Cassy Taylor with comments about joint efforts allowing more accomplishments.

“I always value these moments with Cassy and Pam. We share ideas, challenge each other, and look for ways our three organizations can work smarter together,” said Bloomington City Manager Jeff Jurgens.

The city and town letter did specify any negotiations do not mean the municipalities are giving up legal rights if talks fail. And the bulk of the letter has numerous complex responses to the county involving interpretations of state law.

Who knew what when

One of the abiding questions in the shared sales tax saga is why this came to a head only after a decade and went off the rails so thoroughly that it resulted in this flurry of testy formal communiques. Bloomington and Normal have had representatives on the Behavioral Health Coordinating Council [BHCC] who could, presumably, have raised the contested issues at some previous point.

The city and town have argued the $21 million in unspent money “stockpiled” in the Mental Health and Public Safety Fund is excessive — nearly half the entire amount shared with the county in the last 10 years. Normal Town Council member Kevin McCarthy was the town representative on the BHCC. In a WGLT interview, McCarthy said he did raise concerns about the accumulation of money not spent on mental health initiatives.

“Whenever we got information that gave us an indication. At $7 million, we were concerned. At $10 million, we were concerned,” said McCarthy.

The county has argued much of the fund has been allocated for intended purposes other than mental health, and pointed to changes in the process of allocating money specifically for behavioral health. The county has asserted accumulating funds will cease to be an issue. McCarthy said at the start of talks about revising the intergovernmental agreement, the town had doubts about that.

“We've heard different iterations of that comment for 10 years,” said McCarthy.

Normal Town Council member Kevin McCarthy.

McCarthy said the city and town did not have opportunities to raise the other issues now on the table because they were not aware of them until recently.

Interest income

The town and city have questioned the county practice of using interest income generated from the now more than $21 million in accumulated shared revenue for general county operations.

They estimate that income at more than $1 million per year. McCarthy said the town did not become aware of that issue for a long while into negotiations over a pause in collection.

“Not until recently, and only shortly before it was public … did the town and the city understand that the funds were in an account with other county funds and that they were earning interest alongside of other county funds, rather than off in a separate fund,” said McCarthy.

The county has contended the IGA was silent on interest income and statutes called for the county code to apply to the situation. The city and town argue a different law involving investment of public funds controls the issue.

Jail correctional officers

The municipalities have objected to using shared sales tax money to pay the salaries of certain jail correctional officers, saying those do not strictly relate to the intended purpose of funding behavioral health initiatives. The county has said the expansion of the jail was for the purpose of behavioral health and the duties performed do relate to mental health programs.

“That's part of the challenge here. Those [budgeting] decisions were made off on a separate group in coordination with the CJCC [Criminal Justice Coordinating Council] and other members of that group. And so those allocations never came in front of the Behavioral Health Coordinating Council, and we didn't see those allocations,” said McCarthy.

Technology upgrades

Another point of contention is a county plan to use shared revenue to pay for information system technology upgrades that are not strictly used by Bloomington and Normal public safety agencies. The city and town have representatives on the working group that chose a vendor for the new system that would serve all the entities, including Bloomington and Normal law enforcement. They knew that software paid for with shared sales tax money would go to those other stakeholders as well. McCarthy said the town and city stakeholders focused only on the choice of vendor.

“The difference between knowing that they're going to do something and knowing that they're intending to use the mutual mental health and public safety fund dollars to pay for things that aren't related to that mutual agreed upon IGA terms was not up for a vote. That was never discussed. And that's a difference,” said McCarthy. “The scope of a software project versus how that software project is funded, is the bone of contention.”

[The county has argued the record management software is a system and the shared data and enhanced communication are benefits for all stakeholders. Accordingly, the position is costs should not be separated either.]

Budgeting oversight

The city and town further claim there has been a failure to abide by oversight provisions in the agreement on how mental health funding is allocated and spent. For its part, the county has denied all the allegations, citing a variety of provisions in the agreement, state statues, and case law.

McCarthy said he did not see budgeting decisions because the BHCC focused solely on the mental health component.

He said the town did not become aware of the governance question until a former county board chair paused distribution, changed the structure, and created a Fund Advisory Council [FAC].

“That's the first time that all of those expenditures started coming under the review of people involved in the initiative, which is part of the IGA. All along, all expenditures from the IGA were intended and by IGA meant to be in front of a board for specific review and specific voting on,” said McCarthy.

The two most recent exchanges between the county, city, and town, suggest negotiations could resume, though it’s not yet clear who would be at that bargaining table — staff, elected officials, or both.