Nobody disputes that a census error caused Highland Park to get $77,000 in state tax money that should have gone to Highwood, but the two North Shore cities can’t agree on how–or if–Highwood will get the money back.
Highwood officials have appealed to their larger, wealthier neighbor to hand over the money. Highland Park officials have declined.
Highland Park’s attorney says the city lacks the authority to give up the money, unless asked to do so by the state. State officials, meanwhile, have said they don’t have the authority to ask Highland Park to give up the funds.
The impasse has left Highwood officials unsure of how to pursue their claim. They had hoped the Highland Park City Council would find a solution during its meeting Monday night, but the council left the issue unresolved.
“We were hopeful we’d arrive at a prompt and amicable agreement, a gentleman’s agreement to right a clear wrong,” said Highwood’s attorney, Paul Diambri. “But so far, that’s eluded us.”
A costly geography gaffe
The problem stems from a mistake in the 2000 census, when the U.S. Census Bureau miscoded a block of 1,327 Highwood residents, assigning them to Highland Park, Diambri said. Highwood lost $77,000 in tax revenue the state allocates to municipalities based on population.
Highwood notified the Census Bureau of the error, and the agency issued an official correction in November, certifying the city’s population at 5,470, rather than 4,143, Diambri said. Highwood officials then appealed to Highland Park, which has a population of 30,038, to turn over the money, with interest.
“If we could help Highwood by doing something lawful, we would,” said Steven M. Elrod, Highland Park’s attorney. “But it’s a question of law, not policy.”
The sum is a drop in the bucket for both communities. Highwood’s annual budget is about $4 million, and Highland Park’s is about $41 million. But in Highwood, a traditionally blue-collar town where the median household income is about $43,000, officials say they find it hard to understand why folks in Highland Park–where the median household income is about $101,000–won’t loosen the purse strings.
A state lawmaker who was asked to mediate said she sees a solution.
The two communities could enter into an agreement under the state’s Intergovernmental Cooperation Act, said Rep. Karen May (D-Highland Park). The act gives local governments the authority to forge agreements that are not barred by law, May said.
Such a solution was used to resolve a similar dispute between Baldwin and Chester, Downstate communities northwest of Carbondale, officials said. In October, Baldwin agreed to refund to Chester tax money paid when the Census Bureau allocated the Menard Correctional Center population of 3,193 to Baldwin. The prison is in Chester.
But Highland Park officials contend that since no provision exists in state law for one community to reimburse another for misdirected state tax dollars, any deal would be illegal.
“Highland Park doesn’t have the legal authority to turn over money received from the state,” Elrod said. “The proper process would be for the city to refund the money to the state, should the state request it.”
Highwood officials wrote to the Illinois Department of Revenue for help. In an April 12 letter to Highland Park Mayor Daniel M. Pierce and Highwood Mayor John P. Sirotti, the department responded: “Certification of a revised or corrected census count impacts future distributions only. There is no provision in the statutes for adjustment of previously disbursed tax.”
Court has similar case
Highwood officials are unsure where to turn now, but they are closely watching a court case in which Carbondale sued Illinois to get back tax revenue it lost when the Census Bureau erroneously allocated 4,382 students in a Southern Illinois University dorm to Murphysboro.
The Census Bureau corrected the error in May 2001. When the state refused to refund about $750,000 in revenue, Carbondale took the state to court, said Don Monty, Carbondale’s assistant city manager. Earlier this year, a local judge ruled for the city. The state has appealed.
The outcome of that case could open new avenues for Highwood, Diambri said. Meanwhile he said Highwood officials still hope Highland Park will “do the right thing.”
