Man Bites Dog; Property Taxes Refunded

Published January 7, 1994

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 undereducated. 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 pick-up; 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.