Democracy on the Front Lines
City Administrator’s Blog
Walter Denton
January 9, 2006
I made a presentation to the O’Fallon Rotary Club today on Home Rule. Our recent Special Census has two primary benefits: additional revenue and home rule status. I talked about revenue last week, so this blog will be about home rule.
Home rule was established by the State in 1970 and allows cities greater than 25,000 population the authority to exercise their powers more broadly than is authorized by State law. This provides a kind of self-government by which a home rule unit may exercise any power & perform any function pertaining to its governing and affairs, including, but not limited to: (1) The power to regulate for the protection of the public health, safety, morals & welfare; (2) The power to license; and (3) The power to tax & incur debt.
The above explanation may not be very clear, but what it means is local control. A non-home rule community cannot do anything unless the state legislature says so. A home rule city can do anything it wants unless it is specifically prohibited by the state legislature. It is an important distinction: home rule cities have more say over matters of local concern by being granted the ability to pass laws or regulations without depending only on permissions stated in State statutes.
I believe that O’Fallon residents and elected officials know what’s best for O’Fallon more than the state legislature, so local control is inherently beneficial. That said, some residents have concerns about home rule and feel it may be abused. The following are three misconceptions about home rule that I hope will clear up some of the trepidation.
The number one misconception about home rule is that residents fear their property taxes will dramatically increase. Home rule communities actually rely less on property tax as a source of local revenue than do non-home rule communities. The fact is, the City of O’Fallon, as a non-home rule community, has lowered the property tax rates for City taxes for the past six years. The mayor and city council have always been, and continue to be, committed to keeping property taxes as low as possible for our residents. Achieving home rule status will not change that commitment.
Northern Illinois University (NIU) conducted a study in 2002 on how 153 home rule communities in Illinois use their home rule powers for taxing. The study findings showed that home rule leads to lower property taxes by allowing home rule communities to diversify their tax base and rely more heavily on other sources of tax revenue. Many of these taxes (sales tax, hotel-motel tax, restaurant food and beverage tax, etc.) are paid in part or in whole by non-residents of the City. In other words, home rule taxes are predominately used to shift a portion of the local tax burden from residents to non-residents.
The second misconception about home rule is that residents fear that power will be taken away from the people. The fact is that residents actually gain more power under home rule because it gives local government authority and flexibility to address local problems, lessened dependence upon the State Legislature, and more freedom from legislative mandates.
The third misconception about home rule is that it allows the City Council to drown the budget in debt. Home rule actually allows a community to reduce its borrowing costs. A home rule community has access to ordinary bank loans that are not authorized by State Statute, and they may use their credit, revenues and other resources to pay costs and to service debt related to intergovernmental activities. Therefore, we have more flexibility to invest our money and can get lower interest rates on loans and bonds that will stretch tax dollars further.
This is an exciting time to live in O’Fallon. We have the opportunity to review how our government operates and the ability to improve our community for future generations on O’Fallonites.
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