Committee approves Itasca home-rule question
A committee of about 40 Itasca residents, business owners and officials on Monday unanimously recommended Itasca seek permission to become a home-rule community in the March 20 primary election.
The committee has been meeting since September to debate whether granting Itasca additional taxing and lawmaking powers is a good idea. Members will present their decision to the Itasca village board on Nov. 29 and the board has until the end of December to pass a resolution to put the question on the spring ballot.
“They basically saw there is a need,” Village President Jeff Pruyn said. “One of the biggest fears you get with home rule is that you’re giving government additional powers. But through discussions ... they decided this power already rests with government, it’s just a question of which government, the village or the state. They seem to see it as transferring power the state already has to more local control.”
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 a 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.
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.
But several residents worried about another privilege of home rule: It would allow Itasca to raise the property tax cap without a referendum. So committee members insisted Itasca must impose a tax cap upon itself. Pruyn said he pledged to address this matter before the board during next Tuesday’s meeting.
“Home rule would give us a little more flexibility with our finances, and allow us to continue to offer the services we do,” Pruyn said.