Rough times for Home Rule

Six northern Illinois communities sought to gain Home Rule authority in the March 2012 primary elections. In each of those communities voters rejected the ballot initiative (Clarendon Hills, Itasca, Lynwood, Merrionette Park, Princeton and Prospect Heights) by wide margins. For any Illinois community with a population of fewer than 25,000 residents, voter approval is needed via referendum to become a home-rule unit.

Home Rule on the March 20, 2012 Ballot

Roger Greer, a resident of Pekin in central Illinois, circulated and filed a petition to repeal home rule in a binding referendum on the March ballot. Greer had 1,039 signatures on his petition and he only needed 784 to have the required signatures for getting the issue on the ballot. But another citizen, Carol Shields, represented by an attorney, Luke Taylor, filed an objection to 539 of the signatures on the petition. The electoral board consisting of Mayor Laurie Barra, senior Councilman Tom Blanchard and City Clerk Sue McMillan determined that 296 of the signatures were invalid which left the petition 41 shy of the number needed to get the repeal home rule question on the ballot. Greer did not have an attorney.

DeKalb Township voters who attend the Annual Meeting on Tuesday April 10 will decide on a one person, one vote basis whether or not to put the Home Rule question on the November 2012 ballot as an advisory referendum. Mayor Kris Povlsen tried to quash the agenda item through legal maneuvers but when he had the City’s attorney contact DeKalb County State’s Attorney Clay Campbell they were told the proper procedures had been followed. Mayor Povlsen chaired the electoral board that disqualified a binding petition to repeal home rule in DeKalb in 2009.

It appears that an effort to repeal Home Rule in Crystal Lake is growing.

What’s happened with Home Rule?

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It could be argued that Home Rule stemmed the tide in the growth of taxing units in Illinois. A much stronger argument that it maintained status quo can be documented. Illinois tops the nation in the number of taxing units and has almost twice as many as the next highest Great Lakes state, Ohio.

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An associate professor, Curtis Wood, posits that Home Rule communities don’t tax higher than non-Home Rule communities.

How do scholars answer the question as to how the scope of municipal discretion makes a difference in terms of municipal fiscal performance?

James Banovetz and R. Albritton (found in Banovetz & Kelty, 1987) and James Banovetz (2002) examined the popular notion that elected officials at the local level cannot be trusted with broad powers of taxation by studying the use of tax powers by Illinois local officials in Illinois home rule and nonhome rule municipalities 10 years after home rule was codified in the Illinois Constitution (1971-1981) and over a 30-year period (1970-2000) respectively.2 The evidence from both studies refutes the hypothesis that, given sufficient discretion, local government officials will impose unwarranted property taxation on their residents. The Banovetz and Albritton study found that when controlling for population size and geographic location, there was no difference in the average property tax levy for home rule and nonhome rule municipalities in Illinois. Banovetz (2002) provides evidence that (a) few home rule communities use their home rule powers to levy higher property taxes or levy sales tax to the statutory limit for home rule cities, (b) the legislature and the courts have not felt the need to restrict or constrain the use of home rule powers because they have not found significant patterns of misuse or excessive use, (c) Illinois voters have chosen to retain home rule in 25 out of 29 elections (86%) by an average margin of 3 to 2, and (d) there have only been seven examples of unwarranted use of home rule powers during Illinois’s 30-year experience with very broad grants of taxing power, only three of which resulted the voiding of home rule powers by the voters, courts, or the legislature.

But there are statistics that indicate otherwise. And there are those who wonder why Home Rule communities don’t have lower property tax rates than non-Home Rule communities since they have almost unlimited power to create and increase other taxes, fees and fines.

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The average Home Rule local retail sales tax rate in Illinois is almost twice that of runner-up Ohio. That’s certainly not a business-friendly statistic.

Illinois Home Rule communities have no state imposed debt limit. Coincidentally Illinois is ranked worst in the nation for having the largest combined pension and debt burdens per capita. A report by the Cook County Treasurer shows total debt (operating and pension deficits) of all government agencies in Cook County. Coincidentally or not, of the 498 taxing units in Cook County (the only Home Rule county in the state) their municipalities that rejected Home Rule in the March elections appear on the bottom half of the list. City of DeKalb debt can be found at this link. DeKalb County bond indebtedness at this link. Home Rule is all about unlimited debt without voter approval.

“But I think it’s important for all of us to understand that this was more than just a referendum on home rule. This was a referendum on trust — trust in Princeton’s City Council, and trust lost big. That’s a poor reflection on us as a community.” — Princeton City Council Commissioner Joe Quiram

Trust would seem to be a big issue among voters considering Home Rule. But some who voted against the Home Rule expressed strong trust in their councilmen.

Daryl Becker, chief executive officer of Beck Oil Co., in Princeton, told the NewsTribune that he was opposed to Home Rule because when a city had to make hard choices about spending but has the option to increase its revenue, that makes the choice easier to spend more.

“They made no secret of the fact that the main purpose was to generate more revenue,” Becker said.

That’s really the whole issue with Home Rule. Tax spenders believe it’s easier to get voter forgiveness than it is to get their approval. Tax payers want more and more say because the spenders want more and more of their money.

“If they want a sales tax increase, let them ask for that with a referendum, and if they want a property tax increase, let them ask for that,” Cummings said. “With home rule, the Village Board wouldn’t have to ask what we think anymore.” Jan Cummings, Clarendon Hills.

Still others want voters to know that Home Rule isn’t only about taxes and fees.

In past years, several home rule municipalities have abused their powers, particularly when it comes to real estate. Some home rule units have imposed regulations on property owners regarding inspections of apartment buildings and vacant homes, landlord-tenant relationships, crime prevention measures. Other home rule units have passed demolition taxes, unfettered impact fees and excessive fees with the inspection programs. — Illinois Association of Realtors

On March 21, 2012 — the morning after the election — the sun rose in the eastern sky above all six of the communities that rejected Home Rule. It’s early but so far the sky has not fallen.

“For now I think we all need to sit back and take this as it happens. I don’t think anyone should jump to any conclusions about raising property taxes or utility rates,” Princeton Mayor Keith Cain said.