A Few Words About Video Gambling

The city council of DeKalb approved first reading last night of an ordinance that would overturn a ban on gambling devices to allow video gaming with payouts.

Also, in a daring use of Home Rule authority, it has decided to consider allowing the machines in an establishment where kids hang out.

Come August 27, probable date of second reading, we may be leaving more cautious communities in the dust! Guess who passed the ordinance below:

WHEREAS, states such as Georgia, South Carolina, and North Carolina have abandoned experiments with the legalization of video gaming because of regulatory difficulties, corruption, and the high social costs associated with this form of gambling; and

WHEREAS, video gaming is designed to entice people to play longer, faster, and at higher rates of wagering, according to a study by the Massachusetts Institute of Technology; and

WHEREAS, the Mayor…and City Council agree that legalized video gaming would present a variety of adverse impacts on residents…including the potential for corruption, impact on the costs of law enforcement, regulatory difficulties, and high social costs; and

WHEREAS, the legalization of video gaming within the City…is not consistent with the family-oriented values reflected in our community as identified in the City’s Strategic Plan; and

WHEREAS, the overwhelming majority of input received from…citizens calls for prohibiting video gaming in the City…video gaming is prohibited within the corporate limits of the City…

Make the jump to see if you guessed right. Continue reading A Few Words About Video Gambling

Read the Rosemont Story if You Can

Today the Chicago-Tribune published an investigative report about Rosemont and the family that runs it.

It’s a story about how the Stephens family has amassed riches and tremendous political clout.

Most of all, however, it is a story about Home Rule.

Illinois Home Rule allows:

  • unlimited borrowing

  • the option to forgo competitive bidding on contracts

  • unprecedented levels of nepotism and other ethical lapses

And no, this isn’t just about the folks in Rosemont. Other Illinois taxpayers are on the hook for Rosemont ventures with $7 million in taxi tax earmarks and subsidies annually, while the villagers enjoy grants of up to $3,000 each.

Home Rule and the Real Estate Transfer Tax

**Updated July 31 at end of post.**

Believe it or not, there’s at least one limit to Illinois Home Rule! Here’s a post from the blog of the Illinois Association of Realtors:

I was discussing a transaction in the home rule community of West Frankfort. “My client was surprised to learn at closing she had to pay a fee of 1 percent of the sale price to the city—which meant $1,200 out of her pocket,” the REALTOR® said.

Surprised by the transfer tax, I began researching the history of the real estate transfer tax. The Village of West Frankfort passed a referendum in 2006 making it a home rule community. In 2008, citing their home rule status, the council passed an ordinance creating a transfer fee on the transfer of leases surrounding the city-owned lake. Illinois Association of REALTORS® (IAR) Legal Counsel found that under state law before they implement a transfer tax, the question must be put on the ballot for referendum for voters to decide.

The IAR reportedly wrote a letter to the City of West Frankfort explaining this and now awaits a reply.

I’m pretty sure that if the tax were legal without a referendum, the City of DeKalb would be collecting it already. Continue reading Home Rule and the Real Estate Transfer Tax

Mt. Vernon Group Presents Petition to Revoke Home Rule

Illinois communities automatically receive Home Rule powers when their populations reach 25,000. Mt. Vernon is not one of them because it’s too small (about Sycamore-sized). The city’s residents had to vote for Home Rule, and they reportedly did it in order to finance a sewer project in the 80s.

So what’s the problem? According to one of the current petitioners, Steven Casper, Sr., Mt. Vernon approved Home Rule without understanding the residents would lose their power to vote on tax increases.

Casper and three other Mt. Vernon residents organized a petition, which collected 1,031 signatures from registered voters, to revoke the home rule.

“I don’t know why somebody did not do this before now,” he said. “[We] just don’t like the idea the city has the ultimate power to raise taxes for whatever they want, whenever they want.”

The group only needed about 365 signatures, Casper says.

Supposedly the city council will vet the petition before it can go on the November ballot. This does not sound right to me. The council had its chance to put the question on the ballot themselves. Since they did not — this is the reason folks had to collect signatures — my understanding is that the city clerk should certify the petition for placement of the question on the ballot unless the petition is challenged by one or more individuals. And challenges are adjudicated by election panels, not city councils.

I hope the Mt. Vernon group has competent legal counsel.

Belvidere Using New Home Rule Status to Push for Landlord Registration

Boone County Watchdog has published a proposed ordinance addressing registration of landlords of residential rentals in Belvidere.

Landlords and rental properties would be registered annually at $25 per unit under the proposal.

In comparison, DeKalb has a one-time registration of landlords and rental properties with a fee of $3 per unit, and from there it is up to the landlord to keep registration information current.

Illinois cities use Home Rule authority for this. Belvidere automatically gained Home Rule status when its population was certified at more than 25,000 residents according to the 2010 U.S. Census.

According to the draft ordinance, the Census also showed that more than 30% of all residential housing in Belvidere is rental housing, and “City Council further recognizes that rental housing represents a disproportionate share of the residential housing that has fallen into a state of disrepair within the City,” according to the proposal.

For more information about housing in either community, use the U.S. Census Bureau QuickFacts.

A Look at City of DeKalb Debt

As a Home Rule community, DeKalb has no state-imposed legal limit on its indebtedness.

Non-Home-Rule municipalities (at least those under 500,000 population) do have a limit. It’s 8.625%* of the taxable value of the properties within their boundaries, and they must report compliance with the limit by computing Legal Debt Margins for their Comprehensive Annual Financial Reports (CAFRs).

Out of curiosity, I calculated DeKalb’s debt margin for the last few years to see if the city stays within the limit even though it doesn’t have to. Here’s where it led me. Continue reading A Look at City of DeKalb Debt

Vindication

From the 1973 Assembly on Home Rule in Illinois (my emphasis):

Municipal home rule referenda are dependent on implementing legislation as well as on constitutional authorization. Section 28-4 of the Election Code (“Referendums required by Constitution in respect to units of local government”)* sets forth the requirements for all referenda authorized by the local government article except for those provided for separately by the County Executive Act. Under this new section of the Election Code, a municipal home rule referendum may be initiated in one of two ways : (1) by resolution of the governing board of the local unit, or (2) by fiHng [sic] with the clerk of the local unit a petition signed by registered voters equal to 10 percent of the number who voted in the last general election in the unit.

Normally, you need signatures from 10% of the registered voters to place a public question on the ballot; but if you read through some of the material linked above, you’ll see that Illinois Home Rule plays by a different set of rules (and that it was designed to stay that way).

The City of DeKalb has roughly 23,000 registered voters. In the last couple municipal elections only about 6,000 of them actually have come out to vote.

So it looks like the Home Rule referendum group, aka Barb City Tea Company (aka Mac McIntyre, John Anderson et al) had with 782 petition signatures more than enough to get the question of retaining Home Rule certified for the 2009 Consolidated Election, and should not have been booted off the ballot.

Section 28-4 of the Election Code refers to a section of Chapter 46 of the Illinois Revised Statutes, which are not exactly the same as the Compiled Statutes (see disclaimer) and not readily available online as the Compiled are. However, placing the citation along with “Home Rule” in your search engine will yield the same citation in Illinois Municipal League and NIU publications.