East Dundee fights to maintain home-rule status

East Dundee is fighting to maintain its home-rule status in response to a state legislator's efforts to eliminate it.

State Rep. Allen Skillicorn, a former village trustee, filed a petition earlier this month to place a referendum on the March 20 ballot asking if the village should cease to be a home-rule unit of government. The binding question, if approved, would rid East Dundee of its home-rule privileges, including its 2 percent sales tax and its ability to raise property taxes above the rate of inflation without a referendum.

The move would put the power in voters' hands on issues such as taxation and municipal debt, said Skillicorn, who calls home rule "anti-democratic." But during a special meeting Thursday, village officials stressed that reverting to a nonhome-rule authority would put East Dundee in financial turmoil and lead to negative repercussions for residents.

"We're a man down, and this referendum is kicking a man when he's down," Village Administrator Jennifer Johnsen said. "It will sink the village financially."

To counter Skillicorn's referendum, the village board unanimously approved placing an advisory question on the ballot asking if East Dundee should remain a home-rule municipality. The referendum, which is not binding, is part of an upcoming education campaign to inform voters of the consequences of eliminating home-rule revenues, which generate nearly $2 million each year, Johnsen said.

The village has used its home rule sales taxes and other fees to pay off general obligation bonds, subsidize the cost of services, and lure developers to the area with sales tax rebates, she said. The referendum question is worded to warn voters that without those funds, the village would likely have to implement a $1.94 million, or 304 percent, property tax levy hike next year to fund its annual bond payment.

Additionally, major developers like Speedway would likely back out of their construction projects, and residents could expect to see increased costs for services such as water, sewer and refuse, Village President Lael Miller said. The village, which has recently undergone major financial restructuring, does not have any reserves to fall back on, Johnsen added.

Trustees urged Skillicorn to withdraw his petition and suggested working out a compromise. Skillicorn declined and said the village's referendum is a scare tactic designed to confuse residents.

"The best way of doing it is for the voters to have a say," he said. "If the village focused on high-quality services without the fluff, they wouldn't need the extra tax money."

Skillicorn's referendum proposal came on the heels of the board's approval this month of a 13 percent property tax levy increase. When the village adopted home-rule status several years ago, he said, trustees vowed to not raise property taxes above a state-imposed tax cap - the lesser of 5 percent or the rate of inflation - placed on nonhome-rule communities.

However, Johnsen said the tax hike, which will fund increased pension obligations, still fulfills that promise, as it only recaptures what the village would have collected if it had increased the levy each year by the consumer price index instead of keeping it flat.

Eliminating the home-rule status would actually increase the tax burden placed on residents, she added.

"It's going to destroy the village," Johnsen said. "This is not a scare tactic. It's a reality."