A. What is Home Rule?
Black’s Law Dictionary defines “home rule” as: State Constitutional provision or type of legislative action which results in apportioning power between state and local government by providing local cities and towns with a measure of self-government if such local government accepts terms of the state legislation.
The theory behind home rule is 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.
Home Rule allows a municipality to operate without application of Dillon’s Rule. “Dillon’s Rule” stands for the proposition that in order for a municipality to be able to act or legislate in a given area, it must point to statutory authority to act or its actions must be necessarily implied from a given statute. Without Home Rule, a municipalities must point to a specific statute in order to act.
B. Authority for Home Rule:
The Illinois Constitution allows a home rule unit to “exercise any power
and perform any function pertaining to its government and affairs.” It further
requires that home rule powers be construed liberally. Constitutionally, a home rule unit cannot incur debt payable from property tax or sales tax, receipts maturing more than forty years from the time incurred. Furthermore, a home rule unit cannot define and provide for punishment of a felony.
Specifically, The 1970 Illinois Constitution provides a very broad definition of home rule powers: “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.” (Art. VII; Sec. 6a). Except for prohibiting home rule units from levying taxes upon “income, earnings, or occupations” without legislative authorization, the constitutional constraints upon home rule units are relatively few and have not proven to be significant.
C. How To Enact Home Rule:
(1) By reaching a population of 25,000 or by referendum
(2) A citizen Committee will secure signatures on a petition to pursue a referendum to put Home Rule on the ballot.
(3) After Home Rule is enacted, it can be repealed:
*Retention elections occur for either of two reasons: (1)
voters dissatisfied with their community’s use of home rule
powers may petition the court for a retention election — this
has happened 25 times; or (2) a community which gains
home rule powers by population is required by law to hold
a retention election if its population later falls under the
D. Specific Home Rule Powers:
1. New Tax Sources.
a. New fees and taxes can be established.
b. Transfer of realty tax, provided it is approved by referendum.
c. Hotel/Motel taxes may be increased in rate, and the tax receipts
may be employed with greater versatility (non-home rule hotel
taxes are limited to use for the promotion of tourism.)
d. Property tax can be increased without regard for “tax caps,”
2. New Financing Techniques.
a. G. O. Bonds and Revenue Bonds are not subject to the same
procedural strictures as non-home rule municipalities. For
example, general obligation bonds may be issued without
b. One effect of this is that home rule municipalities are able to
respond more quickly to capital and similar financing needs and
c. In general, bonds issued by home rule communities are more
favorably accepted in market.
3. Personnel Policies:
With Home Rule, a municipality would be afforded greater flexibility relative to personnel policies and practices. One example of this is that as a Home Rule community Broadview could would have better ability to attract lateral hires as Police Officers. Under this system the village would be able hire already trained officers, from other Police Departments that as a Non-Home Rule community the village is unable to accept Without Home Rule, a municipality must always go through a long, expensive, testing process and then send the successful candidate out to the academy for training. This process generally takes well over a year, often leaving small departments under staffed during the process if an immediate need is required.
Other personnel areas where communities have used their Home Rule powers include changing the statutory duties of officers, Board of Fire and Police Commissioners, elimination of civil service systems, and enacting formal merit based pay systems. Home Rule municipalities are not required to follow the strictures of
the Fire & Police Commission Act.
4. Intergovernmental Agreements.
With Home Rule a municipality would have much greater flexibility relative to intergovernmental agreements. Communities have used this successfully in land use planning agreements, waste water treatment agreements, cosponsoring of programs, street and road maintenance, mass transit, and police or fire service agreements.
5. Impact Fees.
A Home Rule community has some greater ability to impose impact fees. Examples of this include park impacts; school impacts; transportation impacts; library impacts; fire district impacts; other municipal services; and most recently several north shore communities, such as Highland Park, are using impact fees to fund/develop
6. Regulation for The Public Welfare:
Home rule municipalities have greater authority and fewer
limitations in developing regulations that best serve the community needs.
Some examples of regulations where a municipality would have greater
flexibility and authority with home rule powers include:
a. Parental responsibilities
b. Liquor control
d. Gun control
e. Certain environmental controls
f. Affordable housing requirements
g. Licenses: Under Home Rule, Broadview could require that all contractors and
developers working in town be licensed. This would give the Village more control if problems arise. We would be able to revoke a license if a contractor did not comply with our local ordinances; we could monitor and control things that depend on
coordinated activities – such as snow plowing; and we could reduce contractor related
crimes where disreputable contractor’s cheat unsuspecting homeowners out of large
deposits and work.
h. Property Value and Zoning:
Property Value and Character of the Community Protection. Local zoning codes are the primary way local property values and the character of the community are protected. Home Rule legally solidifies the authority of local zoning laws and protects against any attempt by Springfield to supersede a municipalities’ regulations.
Sometimes the State law merely implies a community has the authority to act.
Home Rule gives a municipality solid legal authority to act even if there is no clear statutory authority. While State law specifically grants zoning authority to all municipalities, it does not address whether this authority can be extended over schools, park districts, mosquito abatement districts, and other local governments. Home Rule provides another basis for that authority.
i. Redevelopment: Impact fees are a method of assessing a one time fee that is used to help pay for infrastructure that is required by new development. Impact fees are one of a number of strategies that require new development to pay for an equitable portion of necessary infrastructure.
Downtown Redevelopment. Home Rule would give the community vital options
relative to financing improvements and the ability to explore public-private partnerships
which would foster downtown redevelopment
Impact fees are now being used to finance more of the costs of
development than traditional school and park impact fees. For example, Impact fees are now being used to support: Libraries (Arlington Heights, Bartlett, Channahon, Carol Stream, Manhattan, and Wheeling); General Municipal service expansion (Carol Stream,
Channahon, and Manhattan); and Police services (Bartlett). Skokie uses its home rule
powers to create Economic Development Districts”
(j) Governmental Structure:
Home Rule units can make changes in the structure of their governments.
A number of home rule municipalities have passed ordinances creating new boards, commissions, and departments. Home Rule units have changed municipal clerks to appointed rather then elected offices.
Home Rule allows communities in Illinois to take actions not specially prohibited by the General Assembly. Conversely, a Non-Home Rule community can only under take those actions specifically allowed for in the Statues. Subject to some limitations and preemptive statutes, Home Rule authority, gives municipalities the right to govern themselves. Specifically, municipalities “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 public health, safety, morals, and welfare; to license; to tax; and to incur debt”.
In addition, the State Legislature can adopt legislation that impacts Non-Home Rule communities with a simple majority while the Illinois Constitution specifically requires, in most instances that a super-majority (60% vote) to impose a mandate on a Home Rule community.
(7) Taxing Powers More Specifically:
Home Rule units can constitutionally tax anything that is not income, occupations or earnings. With few exceptions, governing bodies of home rule units do not need to ask voter approval when instituting home rule taxes.
(a). Municipal Retailers and Service Occupation Taxes are passed concurrently
at .25% increments with no maximum limit. They are basically a sales tax that
applies to qualifying food, drugs, and medical appliances. Neither applies to
merchandise that requires title or registration.
(b). Hotel/Motel Tax, although not exclusive to home rule units, is allocated
differently depending on a unit’s home rule status. The revenue from a home
rule hotel/motel tax may be applied to any public purpose while a non-home
rule hotel/motel tax can only be used to promote over-night tourism and is
limited by a 5% cap.
( c). A home rule Gasoline Tax is in addition to the federal tax of approx $18.4 cents/
gallon and the State tax of approx $.19/gallon plus the state tax of approx 6.25% sales tax.
(d). An Amusement Tax has a very broad application pertaining to all places for “amusement”, for example, movie theatres. Like the Food and Beverage Tax.
(e). Property Taxes are imposed by both home rule and non-home rule units.
However, non-home rule units can only extend property taxes 5% or the rate of
inflation, whichever is less. If a non-home rule units wants to go beyond the
cap, it must be approved by referendum. Home rule units are not susceptible to
the tax cap.
(f). The Power can also be used to lower taxes:
Below is an example if a ordinance to lower taxes:
RELIEF GRANT TO SENIOR CITIZENS: Any senior citizen, as defined
herein, whose household is liable for payment of real estate property taxes is entitled to a grant pursuant to this Section, which grant will be in an amount equal to that portion of his or her real estate property tax which was levied by and on behalf of the Village. If the senior citizen has resided in the residence being taxed for less than the full year in the applicable taxable year, he or she shall be entitled to a grant prorated on the basis of one-twelfth (1/12) of the total for each month or portion of a month that he or she owned and occupied that residence
Home Rule Taxes That Must Be Passed With Referendum
A Real Estate Transfer Tax is a tax on the privilege of transferring title to real
estate or a beneficial interest in a land trust. The State rate is $.50/$500 of
property value. Counties have a rate of $.25/$500 of property value. Home
rule units may place an additional local real estate transfer tax, however, voters
must pass a referendum prior to this tax being imposed.
Examples Of Municipalities Application of Home Rule:
Elmhurst uses its home rule taxing authority extensively,
imposing four home rule taxes to raise revenue for its general fund. Elmhurst imposed a real estate transfer tax on the privilege of transferring title to real estate within the corporate limits of the City at the rate of $3.00/$1000 dollars of property. The Food and Beverage Tax applies to the purchasing of prepared food items for immediate
consumption and liquor at the rate of one percent of the purchase price. The Municipal Gas Use Tax applies to natural gas and is at the rate of 1.5 percent. Downers Grove Home Rule Municipal Service Occupation Tax and a Home Rule Municipal Retailers Occupation Tax. Both were passed in reaction to a budget shortfall, exemplifying home rule’s ability to raise revenue through avenues other than property.
The Home Rule Municipal Service Occupation Tax applies to any person engaged in the business of making sales of service. It is at the rate of one-half of one percent of the selling price of all tangible personal property transferred by such servicemen.
The Home Rule Municipal Retailers Occupation Tax applies to all persons engaged in the business of selling tangible personal property. It is at the rate of one-half of one percent of the gross receipts from such sales made in the course of such business.
Home Rule Sales Tax, otherwise known as a Home Rule Retailers’ Occupation Tax and Service Occupation Tax. The tax is imposed on persons engaged in the business of selling tangible personal property at retail in the City of Wheaton. This additional sales tax will raise the total sales tax from 6.75% to 7.25%.
In 1998, it repealed its municipal utility tax on gas and created a municipal gas use tax in its place.
Home Rule Retailers’ Tax is applicable to all persons engaged in the business of selling tangible personal property at retail in Harwood Heights at the rate of one percent of the gross receipts.
In addition, Harwood Heights has a Real Estate Transfer Tax of $10.00/$1000 dollars of property value transferred.
(Attached is a list of Cook County Home Rule Municipalities).
In summary, the passage of Home Rule would give the village better control over regulations to protect the residents of the village. The village would have greater flexibility in making personnel decision. The village would have the ability to create creative ways of achieving financing and addressing budget issue. Generally, the opponents’ of Home Rule will argue that property taxes will increase. A proactive way to address this argument is to seek a tax limiting ordinance along with the attempt to establish Home Rule. A tax cap ordinance can be passed with the Home Rule referendum. For example, Oak Terrace passed a self-imposed property tax cap.