Home rule, property taxes talk of City Hall

By Jim Hagerty
Contributor

CITY HALL — The property tax levy and whether Rockford will restore home rule after 35 years were the topics of conversation Monday night among aldermen and city staff.

And that’s fitting as leaders say the two are interrelated.

Without home rule, which was repealed in 1983, Mayor Tom McNamara said tax hikes for property owners has been one of the most significant results. As home rule opponents gear up for another charge, based on the argument that home rule gives leaders unilateral power to raise taxes, he says it is time to examine what has occurred over the past three decades.




“It’s a real easy argument to be against home rule,” McNamara said, adding that community engagement and education is critical to the effort. “I think there is a lack of information out there. There’s no substantial increase to property taxes for communities that have home rule. There have been tons of studies done, and you’re not seeing substantial increases in property taxes in those communities with home rule.”

And that is because communities with home rule, McNamara said, can diversify their revenue streams without placing the burden on property owners. In Rockford the opposite has occurred, evident by a 79-percent increase in real estate taxes since 1983.

According to information from the City Finance Department, a 3-bedroom 3-bath house worth $140,000 in Rockford sees a tax bill of $4,067, around 2.9 percent of its value, of which the city collects $883, or 0.6 percent. In Naperville, the total property tax collected represents around 1.9 percent of a similar home’s value, with the city garnering about 0.2 percent. In Joliet, it’s around 2.4 and 0.4 percent, respectively. Both cities have retained home rule.

“Without home rule, we’ve raised your taxes,” he said. “There are only so many levers we can pull to create revenue.”

City of Rockford leaders have attempted to get creative in the interim, turning to things like tax increment financing (TIF), that have historically done little to take the strain off real estate owners.




“It’s been one of the only tools we can utilize,” the mayor added. “From 1983 to 2005, we had 12 TIF districts. Then we ballooned to over 30. We have to decrease our reliance on TIF districts so we can utilize other incentives to bring in new businesses and help existing businesses expand.”

And while TIF funds have been part of noted developments, whether the 30 districts have been collectively profitable over the years has been debatable. Some districts have performed as expected, while some saw funds ported to other areas of the city without growth at all. In 2009, the city saw a combined TIF deficit of $1.8 million. Those gaps have narrowed with significant developments, namely downtown, but the reprieve for property owners has remained negligible at best.

“I pay the taxes, too, and they’re way too high,” McNamara said.

Whether to place home rule on the March 20, 2018 primary ballot will be up for discussion by the full city council next week.

Also in front of aldermen on Dec. 4 will be whether to reduce Rockford’s property tax levy to fund 2018 operations. Staff has proposed a reduction of $406,512, less than Rockford could levy under state law, which would represent the fifth consecutive year the city either reduced or kept its levy flat.

“The [Finance & Personnel Committee] has chosen to not take all of the property tax levy that we could take, recognizing the burden on taxpayers in the city of Rockford and trying to be sensitive to economic concerns of our residents,” Finance Director Carrie Eklund said.




Eklund said the committee voted to pass matter along to the full council knowing the city is facing $10.2 million budget deficit. The vote showed aldermen are committed to finding other solutions, something home rule proponents continue to champion.

“We want our community to control its own destiny,” Rockford attorney Bobbie Holzwarth said before the vote. “We believe our city needs to grasp the positive momentum and move forward a quickly as we can.”

Holzwarth is the co-chair of the citizen group “Our Decisions. Our Solutions.” Otherwise known as Rockford For Home Rule, earlier this month the group announced its push to place a home rule referendum on the spring ballot. Holzwarth urged aldermen Monday to use the commitment to keep the tax levy at bay to leave the matter up to voters in March, rather than wait a year for next November’s general election.

The reason for the immediate push is simple, leaders say. Rockford is starting to see many of its citizens not only leave the city but Illinois altogether. And if people start exiting Rockford in increased numbers, fewer people will choose to move here.

“We need to do what we can here, to stabilize and entice people to move to our community,” McNamara said.




But, a continued walk along a path of high taxes while fettered to Springfield, the mayor said, will only make matters worse.

“When we rely on property taxes, it hurts our ability to grow,” McNamara said. “To me, it’s about being a community (committed) to decrease its property tax burden on the people who live here and place some of that on those who come and visit or people who utilize our resources here in the community, but don’t live or pay the taxes here.”

Among those, supporters say, would be a new look at the hotel/motel tax. Currently, funds collected under that tax must be used for tourism or economic development. With home rule, taxes and fees collected could be dispersed via the city’s general fund.

Sources have told The Times that at least one rival group is in the works to run a counter campaign to keep home rule off the March ballot, although details have not been announced. The main argument against Illinois’ version of home rule, say critics, is that it gives municipalities the ability to increase taxes and fees without community input.

Rockford is one of only four cities in Illinois eligible that hasn’t retained home rule status, along with Lisle, Villa Park and Lombard. Some cities, such as Downers Grove, have instituted policies requiring a public notice and comment period for any municipal legislative changes that would not be available to a non-home rule city. R.

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