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1. HollyMachina
   Member

   The next Long Term Finance Committee meeting is Tuesday, June 5th at 7pm at Village Hall, Rm 4. One of the topics to be discussed is Home Rule. The link below is info for that meeting:

   http://www.riverside.il.us:80/index.asp?Type=B_BASIC&SEC={05DC5513-E260-49E2-A613-5731E0F2AD9C}
   or http://tinyurl.com/2jmm6r

   Courtesy of Kim, there's a lot of info about Home Rule here, too:

   http://www.celdf.org/HomeRule/DoesmyStatehaveHomeRule/IllinoisHomeRuleandMunicipalGovernment/tabid/288/Default.aspx

   From Wikipedia: Home rule refers to a demand that constituent parts of a state be given greater self-government within the greater administrative purview of the central government.

   What I found out via the web:
   1. Half of the STATES have Home Rule, half don't.
   2. Denver, CO was the first city to have Home Rule in 1904.
   3. IL instituted Home Rule in 1970. This meant that any city in IL w/ more that 25,000 people automatically got Home Rule status.
   4. If a city want Home Rule status in IL but has fewer than 25,000 people, they can go to referendum and ask the people.
   5. Since 1970, 191 referenda about Home Rule occurred. 97 passed & 94 were rejected.
   6. Today in IL, there are approximately 167 Home Rule cities, and 1,113 non-Home Rule cities.
   7. Only Home Rule cities can have a Real Estate Transfer Tax, & it can only happen through referendum.
   8. Elmhurst has used their Home Rule powers by increasing taxes: sales tax, real estate transfer tax, food & beverage tax, gas (natural) tax.
   9. In 2004, through a successful referendum (60% to 40%), Lake Forest became Home Rule w/ a Property Tax Cap position ordinance (they can't increase this tax w/ out referendum).
   10. Lake Bluff also is Home Rule by referendum & has a Property Tax Limitation Resolution w/ it (same as Lake Forest).
   11. Rockford became Home Rule automatically in 1970, but through a 1983 referendum, is now a non-Home Rule city.

   I'm trying to decide for myself if Home Rule is appropriate for Riverside. What do you think?

   Holly

   Posted Friday Jun 1, 2007 09:11 #

2. Catherine
   Member

   Comments anyone? What are the pros and cons of Home Rule?

   I believe the reason that it is wanted is that it confers an increased ability to reverse the property tax cap. Is this so?

   Posted Friday Jun 1, 2007 09:49 #

3. KimJ
   Member

   From Holly's post, "Today in IL, there are approximately 167 Home Rule cities, and 1,113 non-Home Rule cities."

   I don't know anything about Home Rule (I expect I may shortly) but the numbers above make me question why HR would be good for Riverside when over 9 in 10 cities in the state have not adopted it already. What has made 9 in 10 not want to go this route?

   (Corbi, are you ready to jump in???)

   Posted Friday Jun 1, 2007 16:03 #

4. Catherine
   Member

   http://www.citizenadvocacycenter.org/homeruletwo.htm

   ·Home Rule Taxes

   · Property Taxes are imposed by both home rule and non-home rule units. However, non-home rule units can only extend property taxes 5% or the rate of inflation, whichever is less. If a non-home rule units wants to go beyond the cap, it must be approved by referendum. Home rule units are not susceptible to the tax cap.

   · Municipal Retailers and Service Occupation Taxes are passed concurrently at .25% increments with no maximum limit. They are basically a sales tax that applies to qualifying food, drugs, and medical appliances. Neither applies to merchandise that requires title or registration.

   · The Hotel/Motel Tax, although not exclusive to home rule units, is allocated differently depending on a unit's home rule status. The revenue from a home rule hotel/motel tax may be applied to any public purpose while a non-home rule hotel/motel tax can only be used to promote over-night tourism and is limited by a 5% cap.

   · A home rule Gasoline Tax is in addition to the federal tax of $18.4 cents/gallon and the State tax of $.19/gallon plus the state 6.25% sales tax.

   · A Use Tax is a tax on all tangible property that is registered with the State. For example, new or used cars, boats or other vehicles.

   · Cigarette Taxes were recently pre-empted by the State but those home rule units that already had imposed Cigarette Taxes were grandfathered in.

   · Home Rule Taxes That Must Be Passed With Referendum

   · A Real Estate Transfer Tax is a tax on the privilege of transferring title to real estate or a beneficial interest in a land trust. The State rate is $.50/$500 of property value. Counties have a rate of $.25/$500 of property value. Home rule units may place an additional local real estate transfer tax, however, voters must pass a referendum prior to this tax being imposed.

   · Grey Area

   · A Food and Beverage Tax is a tax above and beyond the sales tax. It is unclear whether this tax is only applicable to home rule units. For example, Lombard, a municipality that repealed home rule in 1981, recently imposed a tax on eating establishments based on 65 ILCS 5/11-42-5 which authorized municipalities to “license, tax, and regulate all places for eating or amusement.— Lombard's tax authority has not been questioned.

   · An Amusement Tax has a very broad application pertaining to all places for “amusement—, for example, movie theatres. Like the Food and Beverage Tax, 65 ILCS 5/11-42-5 makes it unclear whether it applies strictly to home rule units. Villa Park and Cicero, both municipalities that do not have home rule, have amusement taxes.

   Downers Grove

   When Downers Grove obtained its home rule status, the Village Council instituted a “Home Rule Policy— to address citizen concern regarding the potential abuse of power. The Policy reads that prior to the adoption of any ordinance imposing a home rule tax on any person or property in the Village (not including property tax extensions), the Council must publish for general circulation a statement about the proposed tax, as well as, an explanation of how the revenue will be used. Seven to ten days later, the Council is to conduct a public meeting regarding the proposed ordinance. The Council will not vote on the ordinance for at least two Village Council meetings, allowing citizens enough time to submit a petition opposing the ordinance (the petition must contain 10% of the voters from the last Mayoral election). If an opposing petition is submitted, the Village Council will hold an advisory referendum and if a majority of voters oppose the tax ordinance, the Council will not adopt such ordinance.

   Posted Friday Jun 1, 2007 22:43 #

5. HollyMachina
   Member

   In case you are in the mood to study:

   Home Rule Links:

   Read Article VII ("Local Government") of the State of Illinois Constitution. Section 6 of Article VII covers "Powers of Home Rule Units."
   http://www.ilga.gov/commission/lrb/con7.htm

   Visit the Citizen Advocacy Center for Home Rule facts.
   http://www.citizenadvocacycenter.org/homeruletwo.htm

   Visit the Downers Grove Watch website for Home Rule info.
   http://www.downersgrovewatch.org/

   Visit Empower Downers Grove Taxpayers website for Home Rule info.
   http://www.empowerdgtaxpayers.com/

   Visit the Geneva website for Home Rule info.
   http://www.geneva.il.us/BulletinBoard/home_rule.htm

   I found the Galena report on Home Rule[LINK] is very informative
   http://www.cityofgalena.org/FileUploads/Home%20Rule%20Report%201%20of%202.pdf

   Enjoy!

   Holly

   Posted Sunday Jun 3, 2007 22:46 #

6. KimJ
   Member

   The City of Galena report is very thorough. (Good Find Holly!) There are interviews with many local villages that have (and have not) considered Home Rule. Everyone should read this report!

   http://www.cityofgalena.org/FileUploads/Home%20Rule%20Report%201%20of%202.pdf

   "GENERAL POWERS
   Borrowing
   Surveys of home-rule communities conducted in 1983 and 1986 showed that borrowing
   flexibility was the most commonly used home rule power. Home rule units may incur more debt than allowed by state law or for purposes other than those allowed by law, without referenda which may be required by law, and at higher interest rates than those allowed by law. For example, general obligation bonds are being issued by some home rule units without the referendum approval that is required of non-home rule units. Also, revenue bonds have been used to finance commercial and hospital projects which are not specified in the statutes, and at interest rates higher than those allowed by law. Several home rule units have issued revenue bonds to provide capital for low-interest residential mortgage loans. Home rule units have also made use of ordinary bank loans, an alternative that may not be available to non-home rule units.

   Economic Development
   Notes taken from various articles documenting the use of home rule powers suggest that economic development objectives have been obtained primarily through home rule flexibility for bond issues(see "Borrowing" above).

   "TAXING POWERS
   In general, home rule allows communities a broader range of taxing options than non-home rule communities. With the exception of the real estate transfer tax, home rule taxes can be imposed by municipalities by ordinance rather than by referendum, and with the exception of utility taxes, the state does not appear to set limits on the tax rates.
   Listed below are examples of taxes that have been imposed by various Home Rule municipalities that have withstood judicial scrutiny. The list is not meant to be exhaustive.

   - Amusement tax
   - Parking tax
   - Hotel/Motel tax
   - Mobile Home tax
   - Wheel tax
   - Liquor tax
   - Gasoline tax
   - New motor vehicle tax
   - Sales tax

   "Of the 159 home-rule communities, 112 have imposed a home rule sales tax, with the home rule tax rates ranging from 0.25% to 1.50%. The combined rate (including the state and county taxes) in these communities ranges from 6.75% to 9.25%. A complete current listing of "Sales Tax Rates in Home Rule Units of Local Government" can be found in Appendix F on pp. 37-40. Sales tax amounts are based on taxable sales of merchandise collected from registered retailers and servicepersons. Broad categories of sales documented by the Illinois Department of Revenue include the following:

   1. General Merchandise
   2. Food
   3. Drinking and Eating Places
   4. Apparel
   5. Furniture, Household, and Radio
   6. Lumber, Building, and Hardware
   7. Automotive and Filling Stations
   8. Drugs and Miscellaneous Retail
   9. Agriculture and All Others
   10. Manufacturers"

   Some thoughts,
   We really don't have much of the above in town. Just restaurants & flower shops, really. How will raising taxes on these in-town businesses help the businesses when their out of town competition is fierce? I understand that we residents do not want additional tax burden, but our businesses do not either. (I wonder how Home Rule would apply to the Zoo?)

   Why is the Budget Committee discussing Home Rule, have they come up with a budget yet? I wonder why our village government budget crisis is not first defined before time is spent looking for solutions? Is this another back door way to get more revenue without having to define any pork in our budget, without having to be fiscally prudent?

   Is this the "Son of TIF?"

   Posted Monday Jun 4, 2007 09:00 #

7. spatny
   Member

   Home Rule is absurd for Riverside. If that power was ever given to this Board it would end up with GO bonds having to be paid off at higher rates by the residents - and the money being used for dubious purposes. Paving with bricks, putting on awanings and adding flower pots and street furniture for who? It's always the cart before the horse here. Now that we are stuck with the VC, the commissions should help to find tax-generating tenants and stop fooling around with thinking up ways to create more vacant properties.

   Posted Monday Jun 4, 2007 09:47 #

8. Catherine
   Member

   Kim, as to the budget, I cannot find the doc on the village website now - perhaps Holly knows the one I am talking about - but it lists $16M worth of needed/wanted maintenance or improvement expenditures that are presently unfunded.

   Posted Monday Jun 4, 2007 14:23 #

9. EricSundstrom
   Member

   The only tax I personally would endorse for use by homerule would be a realestate transfer tax. Most of the communities around Riverside all ready have this tax. However, I think $$$ from this should be earmarked for a specific purpose ie maintenance/Infrastructure improvement.

   Posted Monday Jun 4, 2007 15:21 #

10. spatny
    Member

    Eric - last night they went through the various tax options, with and without Home Rule, and the real estate transfer tax was the only one that generated real money But I thought I read somewhere that you had to have 10,000 residnts to have Home Rule. That may not be correct, but when I see that they spent $10K for the finance consultant, or that the art faire consultant gets $10K win, lose or draw, and can spend up to $15K for promotion, and then we are told that the event will be a "success" if it only loses $4K, I have to wonder. Add up all the consultant fees and stuff like this and I'll bet it's over $300,000 spent on this stuff, plus the redo of the water twoer building for the Rec dept., plus, plus, plus. Then to even contemplate annexing Riverside lawn, a flood plain environment that would rain further costs for police, fire and snow plowing and other maint., and it really looks like some ill-conceived strategies are at work here.

    Posted Wednesday Jun 6, 2007 21:06 #

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