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;

Friday, January 07, 2011www.alliance1820.com

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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

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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.

Friday, January 07, 2011

www.alliance1820.com3

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."

http://www.ask.com/wiki/Andrew_Mellon?qsrc=3044

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/

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



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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


www.alliance1820.com

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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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0 0.1 0.2 0.3

Revenue (Millions)

Revenue

(Millions)

The optimal property tax

rate in this graph is

around 6%, or .06.

http://www.ask.com/wiki/Jude_Wanniski?qsrc=3044

http://www.ask.com/wiki/Jude_Wanniski?qsrc=3044

http://www.ask.com/wiki/Arthur_Laffer?qsrc=3044

http://www.ask.com/wiki/Arthur_Laffer?qsrc=3044

http://www.ask.com/wiki/Polymath?qsrc=3044

http://www.ask.com/wiki/Ibn_Khaldun?qsrc=3044



http://www.ask.com/wiki/Muqaddimah?qsrc=3044

http://www.ask.com/wiki/John_Maynard_Keynes?qsrc=3044

http://www.ask.com/wiki/John_Maynard_Keynes?qsrc=3044

http://www.ask.com/wiki/Laffer_curve



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;

Friday, January 07, 2011 www.alliance1820.com

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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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