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What is Home Rule?
March 20th Ballot Question:
Shall the Village of Clarendon Hills become a home rule unit pursuant to Article VII, Section 6 of the Illinois Constitution?
Other news
Board Approves Local Tax Cap
At its Village Board Meeting on Tuesday, February 21, the Village Board approved an Ordinance that requires a local referendum in order to raise property taxes beyond the level allowed by the tax cap. The Board had discussed implementing a Capital Improvements Property Tax if home rule is approved by residents. Requiring an additional local referendum would allow greater community input on whether to enact a property tax increase. The Village is not currently seeking a property tax increase, but instead will continue to cut costs, find new ways to achieve its goals and look at other revenue sources. The Village is proposing to implement a home rule sales tax and use home rule status to seek additional economic development.
Read the Memo and Ordinance here.
February 15 Informational Meeting:
Meeting Presentation (PowerPoint)
Meeting Question and Answer
Watch it online!
January 18 Informational Meeting:
January 18, 2012 Meeting Presentation (PowerPoint)
January 18, 2012 Meeting Question and Answer
Watch it online!
November 2 Community Discussion on Home Rule:
Home Rule Presentation (PowerPoint)
Home Rule Revenue Projections (Excel) (Updated Jan. 11, 2012)
Home Rule Questions and Answers from Nov. 2 meeting (PDF)
Still have questions?
If you are a member of a community group and would like a Village Board member or representative to make a presentation to your group, please call the Village at 630-286-5401. If you have specific questions about home rule, you may also e-mail the Village.
Home Rule and Clarendon Hills
The Board appointed a Home Rule Research Committee in May to study home rule and to determine whether home rule was appropriate for the Village at this time. The Committee voted 10 in favor and two opposed to consider a home rule referendum at this time. The issue was put to referendum and residents will have the opportunity to vote whether Clarendon Hills should become a home rule municipality at the March 20 General Primary Election.
This web page will be updated throughout the community discussion process with additional questions and answers that residents may have about home rule, the Village's financial condition and the Village's proposed uses of home rule.
What is Home Rule?
- "Home rule is a term which was given to the concept created to provide units of local government with increased means of local control. The theory behind home rule was that some problems are inherently local in nature and, thus, are better dealt with at the local level since a 'one-size fits all' state legislative solution couldn't possibly foresee problems which are uniquely local in nature." Source: Illinois Municipal League Review Magazine, June 1997.
- Home rule was incorporated into the Illinois State Constitution in 1970.
- Today, there are 203 home rule municipalities in Illinois covering approximately 70 percent of the population of the state.
- Home rule is outlined in Article VII, Section 6 of the Constitution of the State of Illinois (adopted December 15, 1970)
- Article VII, Section 6: Powers of Home Rule Units
"A) A County which has a chief executive officer elected by the electors of the county and any municipality which has a population of more than 25,000 are home rule units. Other municipalities may elect by referendum to become home rule units. Except as limited by this Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs including, but not limited to, the power to regulate for the protection of the public health, safety, morals and welfare; to license; to tax; and to incur debt."
- Article VII of the Constitution does limit certain abilities of home rule municipalities:
- No ad valorem property tax receipts may have a maturity period longer than 40 years.
- Limits the power to punish: No home rule unit may define or provide for felonies, or for Class A misdemeanors without specific statutory authority.
- The General Assembly can also vote to impose additional limits on home rule units of government
How do communities benefit from home rule?
- Greater flexibility to solve local issues
- Less dependence on state legislature
- Less subject to state mandates
- Broader authority to tax non-residents (ex. fuel tax, sales tax and hotel/motel tax).
- Not subject to the property tax cap
- Ability to borrow money at lower interest rates (GO Bonds v. Revenue Bonds)
- Broader ability to impose impact fees
- Broader powers to promote and control economic development
- Protection from use of County home rule powers. (Municipal home rule regulation trumps county home rule regulations; however Cook County is the only county in Illinois with Home Rule authority. DuPage has argued for it.)
- More flexibility in determining local form of municipal government.
- More flexibility to engage in intergovernmental shared service arrangements
- Ability to eliminate obsolete organizational arrangements.
- As an example, some Home Rule communities have elected to change the structure of their Board of Fire and Police Commissioners in order to improve operational efficiency.
Why does the Village of Clarendon Hills need home rule?
- The Village is studying home rule as a way to maintain its long-term financial strength, including protecting its AAA bond rating. Without additional sources of revenue, the Village's ability to provide essential services and to maintain necessary infrastructure would be compromised. Home rule allows the Village to rely on additional revenues sources other than just property taxes, as well as to be more responsive to changing economic conditions. Only 31 municipalities in Illinois have a AAA bond rating from either Moody's, Fitch or S&P. Of those 31, 24 are home rule and seven are non-home rule municipalities.
- The Village is not looking at home rule as an alternative to further budget cuts. The Village is still looking at ways to improve efficiencies and reduce costs, and is committed to doing so even if home rule were obtained. However some costs out of the Village's control, including general liability and employee health insurance and state-mandated pension contributions.
Where does the Village of Clarendon Hills' money come from and where does it go?
FY 2011-12 General Fund Revenues:
FY 2011-12 General Fund Expenditures:
How has the Village's spending changed over the past years?
- The Village has maintained an average expenditure growth of 3.73 percent over the last seven fiscal years. The Village has cut $1.1 million in expenses and deferred an additional $904,000. Expenditure increases are the result of general commodity cost increases and increases in the cost for general liability and health insurance premiums. The Village participates in insurance pools with other municipalities for both its liability and health insurance. Through the pools, it continues to look for ways to reduce its cost in both areas. The Village is mandated by State Statute to fund its three pension plans at the required levels for its employees. The Village has no control over these costs, and as these uncontrollable costs continue to rise and revenues remain stagnant, the Village was forced to cut its spending in other areas.
General Fund Departmental Expenditure History
The Village has also maintained its low staffing levels. The Village had the equivalent of 36 full-time employees (FTE's)in 1992. Today, the Village employes the equivalent of 35.9 employees even though population has increased by 15 percent during that time.
The Village has been able to do this by continually looking at lower-cost ways of providing services, which includes outsourcing and sharing services with other units of government, including the following:
- Engineering
- Building/plumbing/electrical inspections
- Plan reviews
- Information technology
- Various Public Works services
- Shared 9-1-1 dispatch
- Regional major crimes investigations
- Automatic mutual fire aid agreement (Hinsdale)
- Library shared services: IT, payroll, tax levy, snow removal, phone
- Liability and health insurance pools participation
- Exploring additional opportunities for shared services
In addition, the Village recently approved a new compensation plan that limits employee wage increases to reflect changes in market conditions and provides increases based only on merit. The intent of the compensation plan is to balance the Village's ability to attract qualified employees with its financial realities by keeping salaries in check.
Why does the Village need Home Rule now?
- Despite best efforts to reduce costs and generate revenues through alternative sources, the Village continues to forecast expenditures exceeding revenues. The Village is projecting a 2.5 percent growth in property taxes and a 5 percent increase of expenditures. If the Village were to obtain home rule in 2012, any additional revenues would not be received until 2013 at the earliest. The Village's current projections estimate the General Fund balance will dip below its 40 percent required fund balance as early as 2015 without additional revenues.
General Fund Balance Projections
with 2.5% property tax growth and 5% expenditure growth annually
If additional revenue sources are not obtained, the Village would need to choose between funding operations or capital improvements. Based on the Village's current ten year capital plan, the Capital Fund balance would be depleted by FY2019 if revenues are diverted to support the General Fund.
Capital Fund Balance Projections
No Additional Revenues
The Village is also considering home rule as a pro-active solution to potential future concerns, including a reduction in revenue sharing from the State of Illinois and additional unfunded mandates.
What else is the Village doing to improve revenues and cut costs?
- Continued exploration of economic development opportunities
- Continued review of current fees/revenue increases
- Exploration of shared services with our neighbors
How will home rule help the Village's financial condition?
- The Village is proposing to implement a 1 percent home rule sales tax and to repeal the current 1 percent places for eating tax. It is expected that the additional sales tax would result in $100,000 in additional revenue annually. In addition, the Village would use the flexibility provided under home rule to seek additional economic development. The Village previously proposed a Capital Improvements Property Tax, however, based on resident feedback, the Village Board is considering imposing a local tax cap that would only allow a property tax increase beyond the current state-imposed tax cap if approved by local referendum.
Would Home Rule give the Village Board authority to raise my property taxes beyond the tax cap?
- The Village Board is considering an ordinance that would require a local referendum to limit property taxes beyond what is allowed under the tax cap.
- Currently, because the Village is not home rule, it is limited by the Property Tax Extension Limitation Law (PTELL), which limits the growth of the tax levy to the consumer price index or 5 percent, whichever is less, plus growth in the tax base through new development. The Village would not be subject to PTELL under home rule, however it has the option to establish self-imposed limits in taxation. In some cases, home rule could cause property taxes to decrease as home rule municipalities are able to rely more on other revenue sources.
- The Village Board can only approve tax increases during a meeting of the Board. All meetings are properly noticed in advance on the Village's website and and the agendas are posted at the Village Hall. Certain tax increases require a Public Hearing and additional notification is required. Residents have the opportunity to speak at all public meetings and would have the opportunity to comment on any proposed tax or fee increases.
- Furthermore, Village Board members are residents of the Village as well and are subject to any additional taxes approved. Elected officials are still subject to being voted out of office if residents are unhappy. One half of the Village Board is up for re-election every 2 years. Home Rule can be taken away from a municipal government with a petition by the voters and another referendum.
Are home rule municipalities still subject to the Illinois and Federal Constitutions?
- Yes. Home rule municipalities still must abide by the State and Federal Constitutions. Residents in home rule municipalities maintain rights under both constitutions and retain representation by elected representatives at the State and Federal level.
Do the 203 home rule communities in Illinois have higher property taxes that non-home rule communities?
- Extensive academic research has been conducted on differences between home rule and non-home rule communities. Research shows that, in fact, home rule communities tend to have lower property taxes as they have relied on alternative revenue sources, such as sales taxes and other fees. See "Where can I get more information on Home Rule?" for a link to additional articles regarding home rule.
Have any communities gotten rid of home rule via referendum?
- Since its inception in 1970, voters in four communities have voted to eliminate home rule: Lisle, Rockford, Lombard and Villa Park. No communities have eliminated home rule via referendum since 1983.
What is this process and referendum going to cost the Village?
- There is no cost to file a referendum question to be placed on the ballot. The Village's costs are limited to staff time to research alternatives and questions from residents as necessary, and publicizing meetings.
Where can I get more information on Home Rule?
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