Tempers flare as Mundelein board kills plan to tax real estate sales

After a long and occasionally hot-tempered debate, Mundelein trustees scuttled a controversial plan to assess a tax on local real estate sales.

But that wasn't the board's only tax-related move Monday night. Trustees unanimously agreed to increase the town's tax on telephone services, both land lines and cellular phones.

The discussion was prompted by the village's continued financial struggles and a predicted revenue shortfall.

At the start of the meeting, a few local real-estate agents publicly spoke against the proposed real estate tax, which would have required a referendum on the March 2012 ballot before being adopted.

Few Illinois towns have such a tax, one agent said, and it could hurt real-estate sales in Mundelein.

Mundelein Mayor Kenneth H. Kessler was blunt in his response, saying village leaders would have to cut services if additional sources of revenue are not developed.

That could mean eliminating the town's street-repair program, which costs about $2 million annually, or stationing fewer police officers in local schools, Kessler said.

“It's going to have to be something,” Kessler said. “That's the level where I think we're at.”

Trustee Ed Sullivan, leader of the board's finance committee, shared a similarly dire outlook.

“We are down to our last gasp in regards to reserves,” Sullivan said. “If we are going to provide services at the level citizens are used to, we need more revenue.”

And yet, Sullivan and the other trustees united to kill the proposed ½-percent tax on real estate transactions. Such a tax could generate between $150,000 and $250,000 annually, Village Administrator John Lobaito wrote in a memo to the board.

A public hearing on the matter and a resolution to put such a plan on the ballot would be required to move forward, but trustees unanimously shot down the plan before it could get that far.

“Every Realtor is going to campaign against it,” Trustee Ray Semple said. “I can't see how it would pass.”

The trustees' opposition seemed to frustrate Kessler, who accused them of political posturing shortly before they voted.

“I'll wait for it on all your next campaign literature,” Kessler said of their votes.

Kessler later added that the real estate agents who opposed the plan “can also report that they were very effective in killing this ordinance.”

He wasn't the only person on the dais who appeared ill-tempered during the debate.

Sullivan and Trustee Steve Lentz exchanged heated words as well. At one point, Lentz accused Sullivan of shaking his fist at him during an earlier discussion of the issue.

Sullivan responded by telling Lentz he was sorry if he scared him.

While the real estate tax plan was killed, a proposal to increase the town's telecommunications tax to 6 percent, from 4.5 percent, was approved.

The 4.5-percent tax was expected to generate about $900,000 during the current fiscal year, Lobaito said in his memo. Increasing the tax will generate an additional $250,000, he said.

Changes in the tax rate must be filed with state officials by March 20, 2012, for it to take effect on July 1, 2012.

Trustees also requested village staff to collect information about a possible local utility tax. Sullivan and Trustee Robin Meier opposed a tax on electricity and gas services, but others said they wanted to learn more.