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East Dundee won't abate property taxes if home-rule status is removed

East Dundee residents will see a spike on their property tax bills if voters decide during the March 20 election to eliminate the village's home-rule status.

Village officials have historically abated property taxes that would otherwise be collected to pay off debt, choosing to instead use other revenues to fund their annual payments. If voters approve a proposal to remove East Dundee's home-rule privileges, property owners will be on the hook to pay the $1.9 million bond payment owed for 2018, according to a measure passed last week by the village board.

That would mean the owner of a $185,000 home would pay an additional $1,200 in property taxes next year, Village Administrator Jennifer Johnsen said.

"The village needs some mechanism to replace the revenues that would be lost from losing home rule," she said. "This is really the only mechanism that would be able to do that."

The binding referendum question, which asks if East Dundee should cease to be a home-rule authority, was placed on the ballot by state Rep. Allen Skillicorn, a former village trustee. If approved, the measure would give more power to voters, Skillicorn said, by eliminating the village's ability to implement various taxes, issue a certain amount of debt or raise property taxes above certain levels without going to a referendum.

To counter Skillicorn's referendum, the village put an advisory referendum on the ballot asking if East Dundee should remain a home-rule authority. The question is worded to warn voters of the increase on their tax bills if the village loses home rule.

At an earlier meeting, Skillicorn called the move a scare tactic and said the village wouldn't need the extra home-rule revenue if it were more responsible with its spending. But the village needs to repay its debt somehow, Johnsen said, adding that losing those funds would sink the village financially.

The village has been relying on home-rule revenues, such as sales taxes, to pay off the $22.5 million total in general obligation bonds issued in 2012, 2015 and 2016 and has about $19.7 million in outstanding general obligation debt, according to village documents. The debt payment varies each year.

Kane County automatically levies the amount of debt owed each year directly from East Dundee property owners, but the village usually cancels those taxes from residents' property tax bills.

Losing home-rule privileges, however, would eliminate revenue streams that generate about $1.65 million annually, Johnsen said, meaning the village could no longer afford to abate the property taxes.

An ordinance abating the taxes for the 2018 debt payment will be filed with the county the day after the election - but only if the village retains its home-rule status, trustees decided last week. If the village loses its home rule, the ordinance won't be filed, and the debt will remain on residents' property tax bills.

The bonds issued in the last several years have been used to fund various public improvements, property acquisitions and redevelopment projects, such as downtown revitalization efforts and the conversion of a former firehouse into a new police station.

Allen Skillicorn
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