First Class City Program2
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Transcript of First Class City Program2
The City of East St.
Louis was established
June 6, 1820
BIOGRAPHICAL DATA
Born at Touchette Regional Hospital in 1967 to Matthew and Hazel Hawkins, both dedicated
Christians, who lived in the Virginia Park area of East St. Louis;
Has resided in Parson’s Place Apartments since January 2004 with his wife Kim Fisher-
Hawkins and their two sons;, Seth (8) and Matthias “Matt” John Hawkins, Jr. (6)
Graduated from :
Alta Sita Elementary School (1979),
Hughes-Quinn Junior High School (1982),
Lincoln Senior High School (1985), and
Northern Illinois University (1998) [Political Science];
Served in United States Navy, 1987 to 1992, as a Machinist’s Mate, Southwest Asia Freedom
Medal for Desert Storm;
Holds Series 7 & 63 FINRA licenses & Illinois Life & Health Insurance Sales Agent licenses;
Worked as an investment banker on Wall Street from 2007-2008 in municipal and corporate
finance;
Worked as a Caseworker for Lessie Bates in Male Involvement and Youth Intervention from
2003-2005;
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MAJOR ASSUMPTIONS:
• As the Property Tax Rate is reduced, the murder rate and all the other crimes will be reduced as well;
• Further, as we approach the average tax rate for the State, our murder rate should approach that of the State;
•Voters will choose what is best for their own economic interest outside of party or person;
• Economically, as we approach the regional tax rate, local economic development will necessarily flow down the tax rate scale as developers and business owners look for the best possible value in the market;
• The 2013 School Board election will present major opportunity to accelerate tax reduction efforts and produce results by 2016 in the recorded Per Capita murder rates;
• Voters will choose candidates that are committed to reducing property tax rates on City Council but especially for School Board.
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2010 2012 2014 2016 2018
Ra
w S
co
re
Murderous Tax Rates?
Tax Rate (%)
Murder Rate
(per 1M)
State Avg. for Murders: .55*
State Avg. for Taxes: 2%
FBI Crime Data Confirms Positive
Results on Per capita Murder Rate.
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2013 School Board Election
THE VISION: 200TH BIRTHDAY CELEBRATION
2010 OBSERVATIONS 2020 PROJECTIONS
Property Tax Rate: 12.78%
Murder Rate: 102
Private Jobs: 500
Businesses: 300
Property Tax Rate: 4%
Murder Rate: 32
Private Jobs: 1200
Businesses: 500
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• In order to stimulate long term growth, we must target long term factors like property taxes
and not short term factors like Business Retention Loans or Grants or 50/50;
• We propose that we provide immediate and continuous Property Tax Reduction strategies as
to stem the tide of 1,000 people that leave East St. Louis annually according to the US
Census Bureau and entice savvy, progressive investors.
• Moreover, the question becomes why are people so violent or so aggressive or serious?
• Could the tax burden create enough stress to turn minor disagreements into deadly conflicts
and sometimes even gun battles?
PROPERTY TAX 101
In East St. Louis, property owners over 6 times the State & National
property tax rate, twice what is paid in neighboring municipalities like
Fairview Heights. (Moody’s Economy, April 2007)
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0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
National State of
Illinois
Belleville East St.
Louis
Avg. Property Tax RateIn 1924, Secretary of
Treasury Andrew Mellon
wrote: "It seems difficult
for some to understand
that high rates of
taxation do not
necessarily mean large
revenue to the
Government, and that
more revenue may
often be obtained by
lower rates."
PROPERTY TAX BREAKDOWNS & COMPARISONS
Tax Structure
• Property tax rates per $100 assessed
valuation.
• Valuation is 33.3% of real property;
•Other category includes park and
health districts like East Side Health &
Metro East Park districts.
Total Property Tax (Millage) Rates
City 2004 2005
East St. Louis 12.53% 12.78%
Belleville, IL
Fairview
Heights, IL*
6.36% 6.34%
Swansea, IL* 7.58% 7.45%
O’Fallon, IL 7.55% 7.54%
Opa Locka, FL 8.55% 8.55%
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FY 2009 Millage
Rate
Share %
District
189
7.54 59%
City Hall 3.099 24%
Other 1.23 9.8%
St. Clair
County
.9160 7.2%
Totals 12.785 100%
*Has no or extremely low City Tax Rate (CTR), or
less than .01% where East St. Louis’s CTR is
twice that of Belleville at 3.066%.
SOURCE: ILLINOIS DEPARTMENT OF COMMERCE AND ECONOMIC
OPPORTUNITY http://www2.illinoisbiz.biz/communityprofiles/profiles/
THE SPECIFICS OF LOCAL TAXATION
Notes and Comments:
• The City Tax Rate (CTR) and the OTHER rate (OR) for East St. Louis are at least twice that of listed cities;
• School districts account for the largest percentage of property taxes in each municipality, 59% in East St. Louis;
• Fairview Heights does not have a city tax rate at all;
• Swansea had a near zero city tax rate which barely shows up on the graph;
• East St. Louis’ Total Property Tax Rate (TPTR) was at least 4 percentage points higher than Belleville and 5 higher than the rest of the group;
• The TPTR seemed to be trending down for every city except for East St. Louis which was trending upwards over the last few years;
• TIF, a major factor in the tax equation, is not listed here but accounted for $38M in expenses for FY2009 in East St. Louis alone.
SOURCE: ILLINOIS DEPARTMENT OF COMMERCE AND ECONOMIC OPPORTUNITY
http://www2.illinoisbiz.biz/communityprofiles/profiles/
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School Tax
Rate
City Tax Rate
County Tax
Rate
Other Rate
Total Rate
PUBLIC SAFETY 101
0100020003000400050006000
Rape Robbery Assault Burglary Auto
Theft
US
East St. Louis
SOURCE: 2007 FBI CRIME REPORTS
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This data from 2006 shows that, in East St. Louis a person is:
• 18 times more likely to get assaulted
•8 times more likely to get raped
•7 times more likely to get robbed
•4 times more likely to get your car stolen
•3 times more likely to get your home burglarized
ELEMENTS OF MURDER
Murder or Homicide
Burglary
Rape
Assault
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The statistical data indicated ratios between murders
and other crimes as demonstrated in the table below:
Crime 2006
Rate
Murder
Rate
Ratio
Rape 251 102 2.46
Robbery 1,347 102 13.2
Assault 5,847 102 57.3
Burglary 2,442 102 24
Auto
Theft
2,068 102 20.3
MURDER 101
US (5.6)
East St. Louis (102)
0
100
200
Murder (2006)
US (5.6)
East St. Louis (102)
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•In 2006, East St. Louis tied with Opa Locka, Florida for the highest per capita
murder rate in the United States at about 102 per 100,000, which means that a
person is 20 times more likely to get murdered.
•With an estimated population at that time of 30,000 people, we see that there
were about 31 murders that year;
•Put another way, 97% of the United States was safer than East St. Louis, Illinois
according to NeighborhoodScout.com.
LONG TERM PROPERTY TAX REDUCTION
Property Tax Reduction Project: 5 to 10 Years Phase 1: Develop legislation to authorize a property tax rebate program
based upon duration and condition of property;
Phase 2: Develop legislation to authorize at least a 20% reduction in
overall municipal tax rate each year for the next four years;
Phase 3: Develop departmental reorganization plan that establishes TIF
as part of Planning Dept.;
Phase 4: Formulate intergovernmental agreement with District 189 to
alleviate tax burden on property owners;
Phase 5: Submit 2012 budget proposal that eliminates over $8M in
historical waste, fraud, and abuse;
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THE LAFFER CURVE: WHAT IS THE OPTIMAL PROPERTY TAX RATE?
The Laffer curve was popularized by Jude Wanniski in the 1970s, with Wanniski naming the curve after the work of Arthur Laffer. Laffer later pointed out that concept was not original, noting similar ideas in the writings of both 14th century North African polymath Ibn Khaldun — who discussed the idea in his 1377 Muqaddimah — and John Maynard Keynes,[3] and other historical precedents exist.
Laffer presented the curve as a pedagogical device to show that, in some circumstances, a reduction in tax rates will actually increase government revenue and not need to be offset by decreased government spending or increased borrowing. For a reduction in tax rates to increase revenue, the current tax rate would need to be higher than the revenue maximizing rate.
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30
40
50
60
70
80
90
0 0.1 0.2 0.3
Revenue (Millions)
Revenue
(Millions)
The optimal property tax
rate in this graph is
around 6%, or .06.
PROPOSED TAX REBATE OVERVIEW
Rebate program has an estimated total cost of about $4.5M per year maximum;
There are an estimated 6,000 owner-occupied property owners that would be
eligible for the program; (www.factfinder.census.gov)
Rebate amounts would vary from $500.00 to $1,000.00 depending upon
tenure and the condition of the property;
Property owners who are currently receiving abatements will not be eligible for
rebates;
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Units Average
Rebate
Annual
Cost
3,500 $750 $2.63M
4,000 $750 $3.00M
4,500 $750 $3.40M
5,000 $750 $3.75M
6,000 $750 $4.50M
PROPERTY TAX REDUCTION PLAN
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2012 2013 2014 2015
ESL Tax Rate
Belleville
Illinois
US
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•As the tax rate becomes aligned with regional, state and national averages, the
potential for economic development becomes real based purely upon the numbers;
•This plan assumes the other tax rates remain constant as we cut 300 basis points, or
3 percentage points, from the cumulative tax rate per year on average;
•Some parts of this will require the cooperation of District 189 and we have developed
strategies to account for whether that cooperation is voluntary or involuntary.
EXPECTED OUTCOMES
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2012 2013 2014 2015
ESL Tax Rate
Tax Avg
Murder Rate
Murder Avg.
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•The per capita murder rate used here is modified from “per 100,000” to “per 1,000,000” so
that the relationships could be graphed more readily;
•We believe that there is a direct, proportional relationship between the average murder rate
and the tax rate so when one goes down the other should follow;
•Higher property tax rates seem to accompany higher murder rates;
•So, by reducing property taxes there should be direct, proportional reduction in the per capita
murder rate with a lag in time of about 12 to 18 months between the two events
$(10.00) $- $10.00 $20.00 $30.00 $40.00 $50.00
2012
2013
2014
2015
Revenue
Expenses
UFB
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•Increasing our capital position will lead to increased bond rating & insure the ability to access funds
needed to address Infrastructure Repairs comprehensively, from sewer to street;
• Recent estimates predict this amount to be between $200M and $350M and would take about 2 years;
• Even with the above budget strategy, it will take about 40 years to reserve in the General Fund;
• Federal and State grants may be available for some of these efforts but this data assumes none;
•The Financial Advisory Authority’s (FAA) departure in 2014 will restore “regular government” which will
allow for City to access municipal finance market to secure sufficient funds for Comprehensive
Infrastructure Repairs (CIP);
•UFB = Unrestricted Fund
Balance or the Reserve
Fund or Savings Account
2009 REVENUE ANALYSIS
Revenue Taxes
Grants
Service Charges
Interest/Investments
Miscellaneous
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Source (2009) Percentage Amount
Taxes 86.2% $34,127,360
Grants 10.7% $4,236,226
Service Charges 2.4% $950,181
Interest/ Investments 0.3% $118,772
Miscellaneous 0.4% $158,363
2009 TOTAL REVENUE: $39, 590,905
BANKRUPTCY OR CHANGE???
2010 STAFFING LEVELS: 196 2012 STAFFING LEVELS: 140
DEPARMENT STAFF
Police 86
Fire 59
City Council 3
Public Works 22
Treasurer’s Office 5
Mayor’s Office 3
City Clerk 3
City Manager 4
Finance 4
Reg. Affairs 4
TOTAL 196
DEPARTMENT STAFF
Police 75
Fire 40
City Council 2
Public Works 12
Treasurer’s Office 2
Mayor’s Office 1
City Clerk 2
City Manager 2
Finance 2
Reg. Affairs 2
TOTAL 140
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EXECUTIVE SUMMARY
By focusing our budgetary and legislative efforts on Property Tax Reduction, we will
have a positive and measurable impact on:
Homeownership and business retention;
Public Safety
Revenue Generation
Balanced Budgets
Fiscal Management & Execution
Some 2014 benchmarks that will indicate success along the way to meeting our
ultimate objective of getting to the State average of 2%:
Population shrinkage will cease and new property owners will begin to occupy vacant lots and empty
homes and tax revenues will respond accordingly by 2014;
Per Capita Murder Rate will decrease in 2014 as new homeowners and businesses return based purely
on numbers and the increased population may also have the effect of more crime reporting which is
most important when it comes to meaningful public safety ;
The Financial Advisory Authority will depart after Council has satisfactorily complied with the schedule,
content, and management requirements for at least three years around 2014;
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