Man Bites Dog; Property Taxes Refunded!
By MICHAEL A. FINCH
Big headlines are often made in small places. Crestwood, Illinois — population 12,000 — has been in the
middle of a quiet public policy revolution for two-and-a-half decades. But now, the news is out: the privatization agenda that Crestwood Mayor Chester Stranczek
is implementing is one that desperately needs to be
enacted elsewhere.
The idea of turning public services over to the private sector is not new. The media, particularly the Wall
Street Journal, have been reporting privatization success stories for years. What is so significant about
Crestwood is that the changes are not piecemeal, nor
are they mere window dressing. Mayor Stranczek
didn't need a privatization committee (meetings,
lengthy reports, and then nothing) to persuade him that
privatization is a good idea. His game plan was simple.
He just did it.
Elected to the office of Mayor in 1969, Stranczek
immediately went to work, eliminating the Water and
Sewer Departments. In the 24 years since then, he has
contracted out virtually everything, from bookkeeping
to street maintenance to water and sewer repair. The
village has only four full-time police officers and no
full-time firefighters. In fact, the entire village workforce consists of 17 people; by next year it will be down
to 14.
The village's entire budget is $1.5 million; other
villages of Crestwood's size average budgets of $5 to $6
million. Corporate taxes are only 44 cents per $100 of
assessed valuation; most cities are at least $2 to $3. Next
year, business licensing fees will be ONE dollar per
year; other cities charge $100 and up.
Crestwood contracts with a part-time accountant to
handle the bookkeeping, at a cost of $7,000 a year. The
village pays an outside contractor $600 a month to handle water billing. Most towns have two or three full-time employees to handle water bills.
The list goes on and on, but here comes the clincher.
In 1993, the Village of Crestwood returned to residents
a 26 percent refund on 1992 Cook County property tax
bills. The only catch? You had to live in your Crestwood
home for at least one year. That's it. In all, 3,200 residents will receive refund checks ranging from $150 to
$1,500.
But the news keeps getting better. "By 1997 we plan
to give back 100 percent refunds on property taxes,"
says Stranczek. "All the resident has to do is bring us
their property tax bill receipt and we will hand them a
check."
Critics say that the village must have lousy services,
the schools must be underfunded, and the kids under-educated. "Nonsense," says Stranczek. In fact, the
Crestwood schools are among the best in the state, and
Chicago residents would be quite happy to be "stuck"
with the services that Crestwood has. Free garbage and
recycling pickup; residents over 55 get free snow plowing, free shuttle bus service, free lawncare and free
shrub trimming. And even with only four full-time police officers, Crestwood has one of the lowest crime
rates in the Chicago area. How can that be? "We have
50 part-time police officers who are constantly on patrol," says Stranczek. The officers don't bother with
parking tickets, dirty windshields, or broken directional lights.
The questions become obvious. How can Crestwood possibly do all this? Why aren't other cities and
towns emulating Crestwood? They can do it because of
the tremendous savings Mayor Stranczek has achieved
through privatization. Every year Crestwood runs a
significant budget surplus. As to the second question,
Mayor Stranczek believes he has the answer. "It's all a
question of politics. You're talking about a lot of patronage jobs. Neighboring mayors have told me, if they
implemented these reforms, they would never get re-elected."
Re-elected or not, it's time for the rest of the country's mayors to stop whining about lack of funds.
They've been too busy lining up at the state and federal
troughs to find solutions to the problems they worked
so hard to create. Crestwood may be a small suburb,
but reforms such as those Mayor Stranczek is implementing are working in larger cities across the country
as well. Steve Goldsmith, the mayor of Indianapolis, is
leading his own privatization revolution, the savings are
in the millions.
Some revolutions happen in waves, others in
trickles. Either way, this revolution is coming ashore.
Chicago Mayor Richard Daley and Illinois Governor
Jim Edgar have established their respective committees to study how the city and state could implement
privatization in the future. But you don't need a weather
man to know which way the wind is blowing. And you
don't need years of study and politicking to know what
works and what doesn't. Privatization works, and
thanks to pioneers like Chester Stranczek we have a
clear road map on how to get there.
Michael A. Finch is Illinois Executive Director of The Heartland
Institute, an independent public policy research organization headquartered in Palatine, Illinois.
February 1994 / Illinois Municipal Review / Page 5
|