Village Governance

During development of the Village’s current Strategic Plan and strategic vision statement, the Village Board discussed the State of Illinois’ significant impact on Village operations. As an outcome of this discussion, the Board determined that it was necessary to evaluate the Village’s current governance structure, including its regulatory, financial and economic development authority. Glencoe is currently a special charter, non-home rule municipality which imposes governance and regulatory limitations on the Village Board related to each of the above subject areas. Staff was directed to research and present information regarding Glencoe’s current form of government and whether it provides optimal regulatory authority and adequately equips the Village to respond to the community’s needs within a continually changing environment.

In both 2019 and 2020, Village staff presented information to the Village Board for its review and discussion.

During the August 20, 2020 Committee of the Whole meeting, the Village Board directed staff to move forward with creating informational materials about home rule governance versus non-home rule governance, stemming from information gained through staff research.

Information presented to the Village Board in 2019 and 2020 regarding governance is found in the listed below. To view information regarding a specific topic of discussion listed on the table, click on the Agenda Packet for that meeting.

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Date

Committee/Commission and
Meeting Type

 

Topic(s) of Discussion

More information:

May 14, 2019

Village Board – Committee of the Whole

Governance structures in Illinois; the Village’s governance structure as a special charter, nonhome rule municipality; municipal legislative authority in general

 

Agenda packet

 

 

 

 

 

 

July 18, 2019

 

 

Village Board – Committee of the Whole

Legal aspects of home rule authority, governance structures in the North Shore region, past reviews of Glencoe’s governance structure, Glencoe’s local legislative authority

 

Agenda packet

September 19, 2019

Village Board – Committee of the Whole

Revenue sources available in the home rule governance structure

 

 

Agenda packet

January 16, 2020

Village Board – Committee of the Whole

 

 

2019 Community Survey feedback related to the Village’s local legislative and financial authority

 

Agenda packet

August 20, 2020

 

 

 

 

Village Board – Committee of the Whole

 

 

Review of previous Committee of the Whole discussions; discussion of the Village Board’s potential next steps pertaining to governance

 

Agenda packet



Governance Information

What is home rule governance?

Home rule was established in the 1970 Illinois Constitution. Prior to the 1970 Constitution, all municipalities were subject to “Dillon’s Rule,” which required municipalities to strictly abide by State law when making decisions regarding municipal affairs and provided that municipalities derived all regulatory and taxation authority from State law. Under Dillon’s Rule, municipalities were prohibited from regulating or taxing in a manner that was not expressly provided by State law. The 1970 Constitution only granted home rule authority to those municipalities with populations larger than 25,000. Municipalities that do not reach this population threshold may seek home rule authority through referendum.

Home rule authority essentially reverses Dillon’s Rule and provides that home rule municipalities have broad authority to self-govern on matters pertaining to its own jurisdiction and affairs, and are only limited by State laws that specifically pre-empt home rule authority. In practice, this means that home rule municipalities maintain local legislative authority to enact local laws that differ from existing State laws, or to enact local laws in areas where no State laws exist, except as specifically prohibited by State law or by certain specific provisions of the Constitution (such as the prohibition on adopting a local income tax). Non-home rule municipalities continue to operate under the principles of Dillon’s Rule and must derive all legislative authority from State law (or, in the Village’s case, authority granted by State law as well as  the Village’s special charter). In practice, this means that unless State law (or the applicable Village Charter) specifically allows non-home rule municipalities to enact local legislation for a specific purpose, a non-home rule municipality cannot enact its own local legislation that differs from State law.

As a special charter non-home rule municipality, the Village derives all of its legal and regulatory authority from the State, as well as the Village’s special charter, which was enacted prior to the 1870 Illinois Constitution.

Supporters of home rule have noted that, because non-home rule municipalities must have express legislative authority given to them by the State to implement local laws, the elected bodies of non-home rule municipalities often do not have full ability or authority to enact local legislation that is responsive to the community’s needs and desires, particularly in areas that are not already addressed by State law, either due to a lag in the State passing legislation related to current and emerging issues (such as licensing and regulating the sharing economy) or because of local policy concerns that may not be experienced on a State-wide level. Additionally, non-home rule municipalities do not have as much legal authority as home rule municipalities to implement new sources of revenue and in some cases, are limited in their ability to determine how certain revenues can be used to fund municipal operations.

What is the difference between home rule and non-home rule authority?
The primary difference between home rule and non-home rule authority is how the municipality derives authority to self-govern, create local laws and develop its revenue sources. Non-home rule municipalities must derive all authority from State law – or in the Village’s case, from its special charter and State law – which means that State law (or the special charter) must specifically give the Village authority to create local laws and revenues. On the other hand, home rule municipalities have full authority to self-govern, create local laws and revenues unless State law specifically limits or pre-empts their local authority.
Is the Village home rule or non-home rule?
The Village is not a home rule municipality. It does not qualify for home rule by population, and there has not been a successful referendum to adopt home rule.  Glencoe is a non-home rule, special charter municipality. Its special charter was created when the Village was incorporated in 1869, giving the Village its legislative and regulatory authority before certain State laws were created. 
Why is the Village discussing home rule and non-home rule?
In 2018, the Village Board conducted an in-depth strategic planning effort that focused on the key question, how do we make Glencoe the community that people choose for the next 20 years? In this discussion, the Village Board identified a goal of evaluating whether the Village’s special charter non-home rule status provides optimal regulatory, financial and economic development authority now and into the future.

This future focus is underscored in the Village’s financial forecasting and emphasis on financial sustainability. Certain State laws and regulations create unfunded mandates, which require the Village to expend money, such as stormwater management requirements or providing specific pension benefits. While these laws and regulations create requirements about how the Village spends residents’ tax dollars, State laws also limit how non-home rule municipalities can create revenues. While Glencoe’s finances have historically been exceptionally well-managed, State mandates such as these require more and more significant portions of the Village’s budget, ultimately impacting how (or if) critical Village services are carried out. 
Wouldn't my property taxes automatically go up if the Village were to become home rule?

Not necessarily. If the Village obtained home rule authority, the Village Board would be required – as it is today – to determine the property tax levy needed to fund the Village’s operations and provide services to residents. As a non-home rule municipality, the Village is subject to the Property Tax Extension Limitation Law (PTELL), which caps the Village’s property tax increase amount based on the change in the Consumer Price Index. While home rule municipalities are not subject to PTELL, some home rule municipalities have chosen to voluntarily abide by PTELL and its tax caps.

Home rule authority does provide flexibility to allow the Village to generate new revenues that are not based on or related to the property tax , such as the tax on packaged alcohol sold at retail, a natural gas use tax (applied to the consumption of natural gas used by consumers that is purchased outside of Illinois), a food and beverage tax on the sale of service of food and beverages (e.g. at restaurants), an amusement/entertainment tax (applied to admission fees and/or tickets sales) and storm water utility fees (a user fee charged to sewer customers to support installation and maintenance of storm water infrastructure). The revenue derived from these types of taxes could decrease the Village’s reliance on the property tax.

Can a municipality choose to limit its home rule authority?
Yes. The village boards of several municipalities have adopted ordinances to self-impose limitations on their exercise of their home rule authority, such as choosing to abide by PTELL, conducting an advisory referendum before issuing general obligation bonds and other limitations. Those neighboring communities that have self-imposed limitations on the exercise of the home rule authority that they obtained through voter referendum include Bannockburn, Lake Bluff, Lake Forest, Northfield and Winnetka.
How could the Village become home rule?

Under State law, municipalities with populations of 25,000 or more automatically obtain home rule authority. However, because Glencoe’s population is well below 25,000, the voters of Glencoe  would need to pass a referendum at a regularly scheduled election in order  become home rule.

A referendum question regarding home rule authority can be placed on a ballot by the Village Board passing a resolution to do so, or a referendum question can be initiated by voter petition.

Currently, Glencoe’s Village Board is considering whether or not to place a home rule referendum question on the April 6, 2021 General Election ballot. Under State law, the Village Board would be required to decide whether or not to place a home rule referendum question on the ballot at least 79 days before the date of the election. Therefore, the Village Board will likely make its decision no later than the December 17, 2020 Village Board meeting.

Is home rule all about money?
No. While local financial regulation is an important aspect of home rule authority, home rule also relates to local ordinance creation, zoning and economic development. 
How can home rule and non-home rule municipalities create local laws differently?
Because home rule authority allows municipalities to create regulations in the absence of State laws, or that differ from State laws, home rule municipalities have greater flexibility to create local ordinances. Using two past examples, before the State passed a law to restrict the use of hand-held cell phones while driving, home rule municipalities had local authority to prohibit hand-held cell phones while driving. Before the State passed the Smoke Free Illinois Act, which prohibits smoking indoors in many public places, home rule municipalities could ban smoking in restaurants and other indoor public places. Non-home rule municipalities could not implement these local laws in the absence of State laws. More recently, the Village could not implement local regulations requested by members of the community to ban the use of coal tar-based asphalt products or locally regulate vicious dogs, since State law does not expressly allow the Village to create local regulations in these areas. Similarly, State law has lagged behind development and adoption of the sharing economy, such as home sharing (such as AirBNB) and ride sharing (such as Uber or Lyft). As a non-home rule municipality, the Village has less authority to regulate home sharing and short-term rentals than home rule municipalities.
Is there a difference in how home rule and non-home rule municipalities can create revenue sources other than property taxes?
Yes. Non-home rule municipalities can only implement local revenues that State law allows them to implement. For example, non-home rule municipalities cannot implement a tax on the sale of packaged liquor (i.e., beer, wine and spirits) or a natural gas use tax, while home rule municipalities can implement these revenues. In some cases, State law allows non-home rule municipalities to implement non-property tax revenues, but places limitations on how that revenue can be implemented or used – for example, non-home rule municipalities can implement up to 1% local home rule sales tax, whereas home rule municipalities are not limited. Home rule municipalities can implement entertainment/amusement taxes and utilize the revenue to fund any aspect of municipal operations; if a non-home rule municipality implements an entertainment/amusement tax, the revenue can only be used to promote tourism.
Are any of our neighboring communities home rule?
Yes – Highland Park, Winnetka, Northbrook Northfield, Lake Forest, Lake Bluff, Glenview, Bannockburn and other area communities are home rule. In the North Shore, only Glencoe and Kenilworth are non-home rule. 
Has the Village previously considered home rule authority?
Yes. In 2005, the Village Board considered – but did not advance – a referendum question to seek home rule authority. In 1998, a referendum for home rule authority failed.