Prospect Heights again weighs whether to try home rule

Home rule communities can impose and raise property taxes that nonhome rule cities cannot, but most come up with other taxes that keep property taxes lower, say experts who have studied the effects of home rule.

“Property taxes tend to be lower because they (home rule communities) have other options,” said Larry Frang, executive director of the Illinois Municipal League.

Home rule communities know that the voters would prefer municipalities not use property tax more than necessary because school districts and other levels of government rely on it so heavily, Frang said.

On March 20, Prospect Heights residents will, for a third time, vote on whether to join the 208 home rule municipalities in the state. The first time, in 2004, the question garnered just 30 percent support. A second try in 2008 received 42 percent of the vote.

Prospect Heights has no general property tax, and Mayor Nick Helmer said his administration has no plans to impose any new taxes under home rule. However, he said, home rule powers are necessary to provide a steady revenue stream for the city.

Officials want home rule because it would allow the city to tap into the $1.4 million accumulated in the reserve fund of the Prospect Heights Convention and Visitors Bureau and the $250,000 excess that the 5 percent hotel/motel tax generates each year. Home rule communities can use that money for general expenses, but other municipalities are seriously restricted and can only use it to promote certain types of tourism, Frang said.

Since the 1970 Illinois Constitution, communities with 25,000 or more residents automatically receive home rule status. But for smaller communities, such as Prospect Heights with 16,256 residents, home rule powers can only come through referendum.

Any community can vote to abolish home rule powers, and four have: Lisle, Lombard, Villa Park and Rockford. Cook is the only Illinois county with home rule powers.

Prospect Heights is one of the few suburbs that has no general property tax, but it collects property taxes for police pensions and another will be imposed soon to pay for street repair bonds that were authorized by voters in 2010.

As further evidence that he doesn’t intend to pursue a general property tax, Helmer said an ordinance to make imposing new property taxes very difficult will come before the city council soon.

“Our city council resides in Prospect Heights,” said Len Digate, a member of the city’s finance committee and a proponent of home rule. “Anything that they enact affects themselves just as much as it does the other residents. If we felt good enough about them when we elected them, why wouldn’t we want them to have the authority necessary to do what is best for Prospect Heights instead of doing only what Springfield mandates?”

Ed Madden, a Prospect Heights resident opposed to home rule, said he is concerned about possible misuse of power. Besides the threat of taxes, opponents are afraid of regulations the city council could impose, and that they will lose some tools for fights against projects like all-city water and zoning changes.

“It’s inaccurate to say the city has to go to Springfield for everything if it’s not home rule,” Madden said. “They can go to the residents. Nonhome rule keeps the decision making power with the local residents.”

Prospect Heights residents fear a property tax, but ironically, in most communities home rule is supported because it allows elected leaders to spread the taxation pain around, by instituting taxes that affect people who shop or dine in town but don’t necessarily live there.

“One argument in favor of home rule is the municipality does not depend on one revenue source but is more balanced,” said Curtis H. Wood, associate professor of Public Administration at Northern Illinois University.

Like Madden, however, opponents have a basic mistrust of their government to use the power wisely, said Wood, who studied home rule across the country last year. He said his findings support Illinois reports from several years ago that home rule communities widely use other taxes to reduce or hold down property taxes.

“Across the nation the property tax is the most unpopular, and politicians who don’t realize that don’t get re-elected,” he said.

Frang believes politics provides the natural check and balance to a city council inclined to abuse home rule powers.

No one would buy bonds from a community with excessive debt, he argues. Home rule provides its leaders with greater local control over its revenues. And in a community the size of Prospect Heights, a relatively small group of people — even 15 percent of the population — could win their argument with the city council, by suggesting their re-elections could be in jeopardy.