Legal and financial consequences of home rule in Rockford
Home rule, created by the Illinois Constitution in 1970, allows municipalities to raise taxes, pass ordinances to address local problems, and do just about anything not prohibited by state law. Non-home-rule communities can do only what the state law stipulates.
Proponents of home rule always opine that the issue appears to boil down to a lack of trust in our elected officials not to excessively raise taxes without voter approval.
In 1983, after two consecutive years of excessive tax increases, home rule opponents obtained 10,800 signatures on petitions for a referendum and eliminated home rule in Rockford.
One reason for the removal of home rule is that Illinois has no recall provisions for the mayor or aldermen who voted for the tax increases and with their terms of office being 4 years, additional taxes and fees could have been raised in the interim.
Also, bonds that are passed without voter approval under home rule provisions take decades to pay off, and are even allowed to exceed the statutory limits as a percentage of Equalized Assessed Valuation.
Rockford, during this current recession, has voted to raise property taxes to the maximum allowed under tax caps while home values were decreasing by over 20%. With home rule, the city would have had no tax cap limitations.
Proponents have frequently stated in the media that in home rule cities the property taxes have been decreased and have been more equitably dispersed.
More equitably dispersed means that other taxes and fees have gone up substantially in those cities. The total tax burden must be considered when discussing home rule.
Simply trusting our elected city officials isn’t the major problem. Since 80% of the city’s budget is spent on public safety and those contracts are typically resolved through binding arbitration, the decision to raise taxes is effectively taken out of city officials hands!
Under home rule, an unelected arbitrator would have few financial restrictions negotiating labor contract expenditures that could force the city to raise taxes to whatever level would be necessary to meet the salary and benefit schedules of comparable Illinois municipalities despite the city’s current tax revenue.
Even if city officials attempted to restrict the tax provisions of home rule in order to pass a referendum, the Illinois State Supreme Court has ruled in Rolling Meadows and Oak Terrace that future city officials may rescind any past city council resolutions, thus nullifying any restrictions attached to the referendum.
It would require a state-wide constitutional amendment to allow the unlimited tax provisions to be removed from any proposed home rule referendum.
Proponents remind us that only five out of 209 municipalities have rescinded home rule in the past three decades, therefore, it necessarily follows that it must be a success.
What proponents neglect to tell us is that it takes a huge campaign to obtain thousands of petition signatures required (10% of the registered voters), to even place a referendum on the ballot to remove home rule.
One must conclude that most residents would be in favor of the city cracking down on absentee landlords that allow their property to decay, or to condemn vacant drug houses, and rightfully so.
However, one must also consider that the city council, under home rule, could just as easily pass regulations regarding occupancy permits, real estate transfer taxes and final inspections, which could prevent homeowners from selling their properties until that property meets whatever code requirements the city council deems necessary.
Proponents also advocate the economic development that would be possible with home rule, but fail to exactly describe what the Return on Investment would be for those who foot the bill through their increased taxation, whatever form it takes. But that is a topic for another day.