Committee questions Itasca home-rule bid
Nearly 40 Itasca residents, business owners and officials voiced questions for nearly two hours Monday about the possibility of Itasca seeking home-rule status in the March 20 election.
All are members of a new home-rule committee, which met for the first time to brush up on village finances and debate whether broadening Itasca’s taxing and lawmaking authority is a smart idea. The group will continue to meet most Mondays through the end of November, when they must present a final report to village trustees.
Officials say becoming a home-rule community would allow Itasca to access thousands of dollars in tax money for efforts like infrastructure improvements.
Itasca is considering the idea partly because its largest revenue source, sales tax, has dropped to $4.4 million per year after the fallout from the recession, officials said. Revenue also declined $2.8 million in the past three years and the current trend is flat.
As a result, Itasca cut services such as its $1.5 million-per-year road-improvement program and, instead, spends about $560,000 annually on road overlays and milling. The village’s general reserve fund also dropped to $2.5 million; leaders say it ought to be about $6 million to cover six months of operating expenses.
Village Administrator Evan Teich said home rule would allow Itasca to keep its sales tax rate at 7.75 percent — below most neighboring communities’ rates — but still collect more money since more items would be eligible for taxation under the new structure.
But several residents worried about another privilege of home rule: It would allow Itasca to raise the property tax cap without a referendum.
“Right now, the people have a little power over the local government. With home rule, we lose that power as far as taxing,” resident Casey Pacione said. “The (village board) we have, we trust those people. But what if four or six years from now somebody else comes in? We don’t know who is going to be trustworthy.”
Teich and Village President Jeff Pruyn agreed but said residents can opt not to re-elect board members who abuse home-rule powers. Pruyn also countered village board members must also pay any tax increases they pass.
Home-rule status would also allow Itasca to access about $980,000 in annual hotel tax revenues, which currently can be used under state statute only for events and projects like festivals that generate tourism.
Some residents voiced concerns that Itasca might cancel special events, which include fests like Fourth of July fireworks, Itasca Fest, Oktoberfest and the Itasca Art and Wine festival. Pruyn said, ideally, Itasca would like to maintain these traditions under home rule, but not expand.
Resident Vito Claps said he thinks home rule would be “a difficult sell” in a referendum.
“A lot of people are hearing home rule, and they’re hearing tax increases,” said Claps. “And I think that’s a scary issue in today’s economy.”
Teich said he understood the committee’s concerns, adding that it’s ultimately their decision on whether or not to pursue the measure on the ballot this spring.
“One of the hopes of this committee is to learn what your concerns are so we know what to look at,” Teich said.