The McLean County Board will loan the village of Hudson just over $81,000 to make up for a shortfall in tax collection by the county.
The no-interest loan approved Thursday will cover the village for taxes not collected in 2026. The village will repay the loan by collecting the missing money in 2027 along with the tax funds from this year.
The error occurred when the McLean County Clerk’s office incorrectly taxed 612 nearby properties as if they were in located in the village. That spread the bill among more properties, meaning properties within the village didn’t pay enough.
Hudson Mayor Mark Kotte thanked board members for the loan.
"It basically made 50% of the property tax a loss to the village, and to the village of Hudson. That is quite a bit of money. We would have had to make some drastic changes if we didn't get that money this year," he said.
The $81,560 is about half the village's property tax levy, and represents about 10% of its annual budget.
Kotte noted there were other ways the situation could have been handled that would have delayed the money arriving in village coffers.
The resolution was approved on a voice vote with no dissent.
Mike O'Grady, Hudson township supervisor, was less kind, saying the error was the latest in a series of gaffes by the county clerk's office.
"Tonight's request for an interest-free loan is not simply about the $81,000. It's about the pattern of errors and the cost of correcting these errors and the erosion of public confidence," he said, adding the cost to the county is greater than the size of the error.
"The financial impact extends beyond the under collected levy," said O'Grady. "Additional time, taxpayer assistance, certified mail notifications, administrative corrections and public communications all consume resources that ultimately come at the taxpayers' expense."
District 8 board member Lea Cline had raised similar questions earlier this week.
Speaking briefly after the meeting, County Clerk Kathy Michael didn't comment directly, but said she had "great respect" for Hudson officials, and appreciated their patience as everyone worked through the first error affecting the Hudson area in 16 years.
In an email sent in response to Cline's inquiry, Michael said before the meeting that it was a human error, but pushed back on the notion that it was related to any other issue. "After 16 years of tax extension service, while any errors are unfortunate, we don’t see a pattern and don’t expect them to happen again," the email said.
The email said her office is working to improve processes and the new tax administrator's understanding of the office's proofing process. "We continue to research this issue thoroughly and continue [to] talk with the subject matter experts at tax vendor Devnet who are always helpful," states the email.
She said she's asked the county treasurer's office abut the total cost of correcting the error.
"This was a tax extension error and as county clerk, I take full responsibility for any errors occurring in our office."
The payback
Another aspect of the error will come in 2027, when Hudson residents have to pay more to make up for being undercharged this year. The amount will vary based on the value of a property, but the average is expected to be "a couple hundred dollars," a county official said.
"While some residents are probably going to be appreciative of a little lower tax bill this year, [they] are going to be frustrated next year when they discover that they must make up the difference," said O'Grady.
County board chair Elizabeth Johnston said the issue will require continuing communication.
"We're doing our best to inform them now, but in a year, the likelihood is that some of them will forget, some of them will be surprised, there may be new residents who were not expecting that on the property," she said. "However, what they will not see is an impact to government services."
All agreed more work needed to take place to make sure tax errors stopped, with Cline noting in her email this was the third incident in less than two years.
"I really look forward to putting some processes in place to make sure this doesn't happen again because this is very disconcerting to residents," added Johnston.
