With Home Rule, Village Would Consider New Revenue Sources (Part 5 of 6)
Home Rule in Northfield: An in-depth look in six parts into the history and effects of putting more power into Northfield leaders' hands.
This article is the fifth part of a six-piece series on the issue of home rule in Northfield, which will appear as a referendum on the ballot Nov. 2. To read the first part of this series, 3 Weeks Before Vote, Questions About Home Rule Remain, click here. To read the second part of this series, In Brief, A Description of Home Rule, click here. To read the third part of this series, The Power and Limits of Home Rule, click here. To read the fourth part of this series, So How Bare Are Northfield's Finances?, click here. Watch the video next to this article for more information on home rule.
If home rule is passed in Northfield, how will the village exercise its new powers? Following the Long Range Financial Subcommittee's recommendation to move forward with home rule in 2008, the village board set up a Home Rule Task Force, headed by Joan Frazier and Fred Teichert, to research and explore what Northfield might do with home rule.
The taxes President Fred Gougler said the village would consider raising are those on sales, gasoline, and food and beverages. These taxes would impact non-residents as much as they would residents, if not more, he said. During its analysis on home rule, the village hired a marketing firm to survey major retailers in Northfield. The survey determined that 80 percent of shoppers are not local.
"If I go to Hackney's in Glenview and I buy a hamburger, I'm actually paying the village of Glenview a local sales tax and a local food and beverage tax," Gougler explained. "But when the Glenview resident comes to one of our restaurants in Northfield, there's no revenue coming towards the village."
Village Manager Stacy Sigman presented projections of how taxes levied under home rule could feed the budget to the board back in February:
Sales Tax: $420,000/year
If the village applies the average home rule sales-tax rate, 0.75 percent, the board projects it will receive $420,000 annually. This tax would apply to all businesses within Northfield that sell tangible personal property or "immediate consumption" food and drink. It would not apply to state-registered property, food consumed off store premises such as produce, or medicine or medical supplies. There are no limits on what the revenue could be used for, and voter approval would not be required to levy this tax.
Food & Beverage Tax: $60,000/year
If the village applies the average home rule food & beverage-tax rate, 0.75 percent, the board projects it will receive $60,000 annually. This tax would apply to all alcoholic beverages; soft drinks (but not fountain drinks); and food prepared for immediate consumption in restaurants, Dominick's, and convenience stores. There are no limits on what the revenue could be used for, and voter approval would not be required to levy this tax.
Gasoline Tax: $96,000/year
If the village applies the average home rule gasoline-tax rate, $0.03 per gallon pumped, the board predicts it will receive $420,000 annually. This tax would apply to all gas stations in Northfield.
In essence, the village estimates that home rule powers could be used to increase annual revenues by $600,000. Home-ruled municipalities also have the authority to levy taxes on pretty much anything that is not specifically restricted by the Illinois Constitution: real-estate transfers (only with a voter referendum), hotels/motels, demolition permits, wheels and property taxes. But Gougler said the village is not considering any of these options.
Illinois law mandates a cap on property taxes, so residents in non-home-ruled municipalities either pay the rate set by the Consumer Price Index (CPI) or a rate of 5 percent, whichever is less. Non-home ruled communities can raise property taxes above the cap, but they must get voter approval by a referendum.
The fear of limitless property tax increases has quashed home rule referenda in several municipalities. Because of this, Northfield's trustees have been outspoken on the village's plan not to increase the property tax rate above the current state cap. The board of trustees passed an ordinance in 2010 pledging they would not raise the property tax above the state cap. This ordinance, like any other, can be repealed – and the property tax boosted – but only pending a voter referendum. Current Northfield property owners pay a rate of 0.479 per $100 of equalized assessed valuation (based on Cook County rates from 2008).
In a 2002 study on Illinois home-ruled municipalities, local-government expert Dr. James Banovetz discovered that one-fourth of the communities surveyed have used home rule to increase property tax levies above the state tax cap. When Winnetka adopted home rule in 2005, it did not raise property taxes but at its most recent village board meeting, the board announced it would be considering a property-tax raise.
Other Home Rule Powers
Gougler said that initially, village trustees weren't aware of all the flexibility and non-taxing authority home rule would allow. Upon discovering these other benefits, home rule became an even more attractive option.
Under home rule, Northfield would be able to make more zoning regulations which would allow the village to demand cleanup of the approximately 54 foreclosed properties in the area, Sigman said. Local leaders have also said home rule would give them more control over things like property maintenance, community development and flooding prevention.
The board released a statement of home rule goals that included more funds for sidewalk snow removal, well-being checks, animal control, crossing guards and Willow Road advocacy. Gougler, however, told Patch that there is no direct correlation between Willow Road and home rule.
"We have obviously been supporting our three-lane solution for Willow Road, expending what I would consider to be modest sources of funds in that direction," Gougler said. "Home rule, providing us with additional flexibility, would enhance our ability to continue that should we desire to do that."