Home rule would provide River Forest funding alternatives
James Boose, of Chicago pumps gas at the Mobile Gas Station, 754 N. Harlem Ave., on Friday in River Forest. River Forest wants voters to grant the village home rule powers this fall. Were it to gain home rule, the village could raise gas taxes. | Rob Hart
Updated: October 21, 2012 2:11PM
RIVER FOREST — The village’s gaining of home-rule authority would not have a huge effect on River Forest’s annual budget, local officials say.
River Forest leaders say that if residents approve home rule in the November election that less than 2 percent of the municipal government’s $13 million annual budget would eventually come from sources not tapped into already.
“We are looking at options,” Village Administrator Eric J. Palm said of municipal funding alternatives under home rule. “We are not predicting any of these as a definite.
“There has been talk about a gas tax,” Palm said. That’s just one possible source of alternative revenue under home rule.
Palm and other village officials note that none of the possible home-rule revenue-generating mechanisms are already being banked on or have been discussed by the Village Board. Almost half of the village’s revenue is and will remain from property taxes. That will not change regardless of the village’s home-rule status.
The village garners 11 percent of resident tax bills, he said.
Palm admits alternative sources of funding through home rule powers wouldn’t have a huge impact on village finances. But with the Village Board’s recently passed self-imposed tax caps, should the village get home-rule authority, those alternative revenue sources could be enough to make up the annual Consumer Price Index, which is tied to the caps.
“If we can offset property taxes with other revenue sources, why not?” Palm asked. “Whatever we can do to limit the increase on our residents, we are going to examine.”
The village having the authority under home rule to tax residents at will has gotten the lion’s share of resident attention thus far. Village officials hoped to diffuse those concerns with the self-imposed tax caps. The potential for a village gas tax, which could generate $80,000 annually for River Forest with a 5-cents-per-gallon tax, has also gotten some attention.
But a little-discussed head tax on employees at River Forest’s two universities would be a big possible source of non-property-tax revenue under home rule. The head tax would be on any employer with at least 350 workers, but no entities in town, other than the two universities, have work forces that large.
A head tax of $5 per employee could generate $100,000 annually in funding for the village, officials said.
Village staffers note that the two universities receive the same police protection and emergency services as residents and local businesses, but pay nothing for them due to their tax-exempt status. Chicago, a home-rule municipality, has an employee head tax in place, but Mayor Rahm Emmanuel said he hopes to eliminate it by 2014.
“Our police and fire run out there,” Palm said. “They use our village services like any other businesses, but they don’t pay property taxes. This would address that and provide a way to recover money for our services.”
Palm said the village was unsuccessful in trying to institute a pilot program to recoup money for services from the two educational institutions. He said the head tax could recoup that money, or at least be the stick to get the two universities to the table for further discussions.
At least one of the schools is keeping a watchful eye on the home-rule issue.
“It is premature for us to respond in any great detail about the possible implications of a home-rule referendum in River Forest,” said Jessica Mackinnon, director of public information for Dominican University. “However, we are watching this issue closely, knowing that passage could have a financial impact on Dominican University, as well as Concordia University.”
Concordia officials were unavailable for comment as of press time.
Another potential source of income would be a tax on package liquor sales. Oak Park, which has home-rule authority, has a 6 percent tax on package liquor sales. River Forest officials estimate a possible 3 percent tax on package liquor sales in the village would generate $48,000 annually.
Assistant Village Administrator Mike Braiman noted under home rule that River Forest could extend its place-of-eating 1 percent tax to places that provide carry-out food, such as Jewel.
“We are not talking big dollars,” Braiman said, “but we are providing options.
“The idea is that these would be paid by non-residents coming through the village and helping keep property taxes lower.
(First in an ongoing look at the home-rule referendum on the ballot this fall in River Forest)