Draft. Village of Itasca. Home Rule Referendum

Transcription

1 Draft Village of Itasca Home Rule Referendum

2 TODAY S VILLAGE Itasca is a Non-Home Rule community-why? We are under 25,000 people We have not passed a Referendum to become Home Rule We did pass a ½ % Non-Home Rule sales tax referendum in 2005

3 TODAY S VILLAGE 8,900 residents in a metropolitan area 30,000-35,000 daytime population 5 hotels that generate $900,000 in taxes $4.4 million in sales tax receipts Major Highway access

4 Home Rule Law The State allows Home Rule communities broader discretion in the administration of law and operations in many areas Housing and community enforcement Regulation of hiring and discipline Borrowing Permissive vs. non-permissive language Taxation Provides for a broader range of options including reuse/reallocation of current taxes

5 Home Rule Facts There are too many provisions in the state law to note here but Home Rule powers extend through all facets of local governance including Library Levies, developer impact fees, zoning issues, bonding, property taxes, sales tax, hotel taxes and local ordinances

6 Home Rule Facts Communities with Home Rule have diversified revenue source options Communities with Home Rule have greater control over local matters including taxation Communities with Home Rule can capitalize on their strengths

7 Home Rule Facts State representation vs. local governance The difference between a one size fits all approach vs. tailoring a law that fits Itasca Springfield vs. Itasca Not all issues are subject to Home Rule powers

8 Home Rule Facts By state law Village s cannot advocate or expend funds for adoption of Home Rule Subject to open meetings act Can establish a group to review and recommend to the Board Can provide facts Cannot raise funds

9 Getting to Know Itasca In order to discuss why or why not Home Rule you should know a bit about what we do and what we are trying to achieve, where we get our funds from, what we spend our tax dollars on, and some of our current constraints

10 How are we currently funded? Municipalities have several main sources of funding: Property tax Sales tax Utility tax Income tax apportionment (per capita) Permits Fines Hotel tax

11 Top 6 Itasca Revenue Sources Sales tax $4.4M* Property tax $2.63M Telecom tax $1.05M Hotel tax $980K Income tax $783K * Utility tax $615K estimates from budget

12 Village s Budget Goals and Objectives Reduce or eliminate the use of one time sources of revenues to balance the budget Provide stable funding for vehicle and capital equipment replacements Reduce the number of employees through attrition rather than layoffs or furloughs Continue to provide the same levels of services--- Mayberry

13 Village s Goals and Objectives Rebuild the Village s General Fund reserve back to a six month operating level: $6.0- $7.0M, currently $2.8M Maintain the Village s fiscal stability Address Storm-water concerns

14 Village s Goals and Objectives Through a combination of expenditure cuts, new revenue sources and/or the rebound in Sales Tax revenues, restart the annual road rehabilitation: No road program for 4 years Curb and gutter was $1.5M annually New plan: do mill and overlays at $560k annually for 5 years

15 Top 6 Expenditures Police Public Works Water/Sewer operations Roads and Infrastructure Debt service Garbage fees

16 Home Rule can affect these Sales tax Hotel tax Utility tax Property tax areas

17 How Home Rule Affects the Sales tax a 7.75% sales tax is currently imposed on goods purchased in the Village of which 1.5% currently goes to Itasca-our rate is below our neighbors, except Roselle This generates $4.4 million annually ($1.4m is from the non-hr sales tax. It does not cover all items of a HR tax and use of these funds are restricted by state law)

18 Home Rule Affects the Sales Tax The Village has limited traditional sales tax outlets No Car dealerships No Big box retail No Shopping malls Mainly our sales are corporate sales Office Max Corporate sales-merger with Office depot may affect us! Henricksen and Sons (office furniture)

19 Sales Tax Threats CMAP has discussed reallocation of the formula-the state cannot be far behind Phone/office sales are portable Home Rule status not likely to affect any new reallocation formula developed by the state

20 The Sales Tax Facts Sales tax is our largest single funding source at $4.4M Sales tax is 33% of our total revenue Receipts have declined $2.8m over three years & the current trend is flat 80-90% of this tax is paid for by others

21 Our Neighbors Sales Tax Rates Wooddale +.5% Roselle -.5%, Bloomingdale +1% Addison +1.25% Elk Grove +1.75% Schaumburg +1.75%

22 $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 $299 $209 How Do We Compare? DuPage Municipalities Sales Tax Per Capita, $1,796 $754 $509 $446 $423 $368 $302 $290 $294 $228 $229 $204 $172 $165 $161 $113 $145 $148 $173 $183 $154 $82 $93 $105 $39 $10 $119 Sale Tax Per Capita Addison Bensenville Bloomingdale Bolingbrook Burr Ridge Carol Stream Elmhurst Glen Ellyn Glendale Heights Hanover Park Hinsdale Itasca Lisle Lombard Naperville Oak Brook Oakbrook Terrace Roselle St. Charles Villa Park Warrenville Wayne West Chicago Westmont Wheaton Willowbrook Winfield Wood Dale Woodridge

23 Why Does Home Rule Affect the Sales Tax Why does this matter? The non-hr tax does not include all the items covered by the HR sales tax Use of this portion of the tax is restrictive The Village could raise the local sales tax rate by ordinance rather than referendum by 1/4 % increments

24 Sales Taxes-Who Pays If you host a special event at a hotel or buy office equipment, furniture or supplies from Office Max or eat at a local restaurant, etc. Residents mainly pay sales taxes on local purchases; food, beverages, and items purchased at retail (Walgreens, Speedway) Residents are mainly spending their sales tax dollars in neighboring communities: Wood Dale, Addison, Elk Grove-think: Target, Wal-Mart, & Jewel

25 Sales Tax Question: is there any policy questions, research, or actions necessary in this area?

26 Why HR is Important to the Hotel Tax We have 5 Hotels and collect $920,000 annually. It was $1.2M-pre 2009 We have a current Fund balance of $1M ( an additional $200,000 will be added this year). Current General Fund balance is $2.5M Non HR Hotel Tax communities can only use funds to generate tourism Village has defined tourism to include festivals, the Nature Center, and our downtown

27 Why HR is Important to the Hotel Tax Non-Home Rule communities can levy a hotel tax, capped at 5% and can only use the funds to promote tourism Home Rule communities are not capped at Home Rule communities are not capped at 5% and they can use these funds for any governmental purpose

28 Why HR is Important to the Hotel Tax The village is funding the Museum renovation, sidewalk improvements in the downtown area and the replacement of the boardwalk from this fund Special events are important to this village and we these funds to host or sponsor events as part of our overall marketing strategy and quality of life

29 Why HR is Important to the If HR were achieved: Hotel Tax The Hotel tax funds could be used for general government purposes Roads/infrastructure/storm water Public safety Any activity We could reallocate the $1.2M fund balance to General Fund Reserve as we have $3.5M to go to achieve our goal of $6M

30 What is the downside? Creates tough choices in the future Roads and infrastructure vs. special events Funding dependant upon the economy

31 Policy Question Are special events important and should we continue with them regardless of Home Rule status? If funding source was an issue would that If funding source was an issue would that matter?

32 The Utility Tax Home Rule affects this tax Non HR communities cannot tax natural gas consumption by out of state providers This tends to exempt larger manufacturers HR communities can capture these out of state entities thereby collecting the tax more equitably

33 Policy Questions Are there any questions?

34 The Property Tax HR affects the property tax in one major way: HR communities can exceed the property tax cap by ordinance rather than by referendum But, communities can self-impose a higher threshold on the use of this power

35 Review Of Other Funding and Expenditure Reducing Options Garbage Fees Vehicle stickers Non-Home Rule sales tax of ½ % Referendum on Property Tax Reduce Services Personnel Programs

36 How Are The Funds Be Used? The Village wants to continue its investment in its infrastructure The Home Rule referendum allows us to keep investing in: Streets/Sidewalks Infrastructure Flood control

37 How Does Home Rule Affect You? It depends: Your $20.00 dinner bill may increase slightly Why? The Village s tax rate of 7.75% would still be 7.75% but you may pay a ½% more as the HR sales tax covers more items than the non- HR so it depends on what you buy What you get: money to fund capital projects; roads, bridges, flood relief & Quality of Life

38 Village Finances Itasca does not need this funding for: Its current Operating Budget The Village needs the additional funds for a sustained and meaningful infrastructure program Stormwater/flood control Roads, etc.

39 Sample ballot question Shall the Village of Itasca, for the purposes of funding public infrastructure be granted Home Rule Status? YES NO

40 Questions