The Village of Long Grove, Illinois is one of many communities throughout the United States learning the hard lessons of depending on continuous growth to sustain their network of public infrastructure. While cities worldwide are replacing crumbling road infrastructure with more aesthetically appealing landscape, smaller townships and villages face fewer available options. The ability to sustain public works is dependent on new building permits, new homes, and new money coming into the community. After the home building market came crashing down almost six years ago, money for local municipalities dried up quickly. Leaving lots of work to be done and little cash on hand to fix the problems.
If you took the time to visit Long Grove, you would easily come to the conclusion that money is the very last problem facing the village’s 8,000 residents. Census Data[1] illustrates that of the roughly 2,400 households, close to 50% have a household income of over $200,000; with a mean of close to $240,000. While that’s still not enough to get into one percent territory, Long Grove can certainly be called an affluent community. Almost all its residents are homeowners, with less than 100 active properties estimated to be occupied as rental units.
Despite all its resources, Long Grove’s roads have managed to fall into disrepair regardless of health of the housing market. How can that be? For starters, the villages’s income from local sales taxes cannot make up the loss associated with not having a property tax. That might change in March when voters will go to the polls to decide if they want to adopt a local property tax. The Daily Herald reports the primary goal of a property tax is to fix the budget shortfall for road maintenance on the village’s public thoroughfares. It is estimated it will cost up to $550 per year for someone with a $750,000 home. This option would raise the anticipated $900,000 per year, according to Mayor David Lothspeic, needed to maintain those main roads. The Mayor noted to the Herald that the work needed on thoroughfares has mostly shifted from patching to resurfacing as the condition of the roads worsens. He also acknowledged the need for an additional policy to ensure the continued maintenance of roads in subdivisions and everything else not covered under the “thoroughfare” umbrella.
The Chicago Tribune, on the other hand, reports there is an alternative to taxes allegedly on the table: privatize the roads.
Let’s assume that figure of $900,000 is still accurate (The Tribune says the shortfall is over a million dollars, but for the sake of argument we will keep the estimate conservative). If the cost to maintain village’s main roads was split evenly between all residents – as opposed to a sliding scale based on the value of property – the cost per household would come out to just shy of $400 per year. That certainly seems reasonable, especially given the low percentage of total income that $400 would represent out of the typical household income in Long Grove. This is the case if the main roads were all privatized.
The other part of the plan, as the Tribune points out, is that many of the roads which have been earmarked for privatization are subdivision roads. The residents and homeowners associations in each subdivision are given the option to take over their own maintenance duties. If adopted, subdivision residents can expect a steep increase in their homeowners association fees, with the amount differing from subdivision to subdivision depending on what the homeowners association decides to do.
As already mentioned, much of the maintenance work is shifting from patching to resurfacing. Resurfacing is expensive. The estimated cost to mill and resurface a road is roughly $313,000 per lane mile. So, the cost to mill and resurface one mile of road with a single lane in each direction would be $626,000. If there is a turn lane, that number jumps to $939,999 per lane mile.
This Village Map of Long Grove, IL from their website shows how small the community is.
What does that mean for residents? If we believe the Tribune’s figures which state there are 29 miles of public road in Long Grove and that the village is considering privatizing almost half of them then we can estimate the potential for approximately 14 miles of private roads. For the sake of argument we will assume that, because this is a small community, most of the roads are two lanes. To mill and resurface all of those roads would cost approximately $8.8 million, or somewhere in the neighborhood of $3,700 per household. That number is hard to swallow regardless of if the roads were publicly or privately owned; even if you have a high income. However, if the roads were privately owned, there is no chance of lowering the local burden via an agreement with the county, the state of Illinois, or through federal grants.
Furthermore, the estimated $3,700 cost per household doesn’t include maintenance items such as salting and snow removal, just the road milling and resurfacing. And that is only the estimated cost to fix all of the roads potentially taken private. If all of the roughly 30 miles of roads in Long Grove are in need of resurfacing, the cost would (at least) double to nearly $7,500 per household. Plus all the necessary annual maintenance.
For communities within the median income range with moderate to low density, the idea of paying for this out of pocket would result in little, if any, road maintenance every being completed. The privatization of paved roads disproportionately affects those who live in rural areas: because the density is low, there are fewer residents to pay per lane mile of maintenance. The higher cost per person is on top of the fact that those who live in rural areas are more likely to have lower incomes. In a true free market where all roads are privatized, paved roads would be a luxury for affluent rural communities and urban areas. There is also an unpleasant scenario where some subdivisions could take some roads private whiling keeping others public, leading to an unpleasant patchwork where some roads are maintained and others fall into disrepair.
It is hard to imagine a situation where this works out favorably for residents. After all, if half the roads are in good shape and the others are in poor shape, does it really matter if any of them are in good shape if you have to drive on all of them every day to and from work? The trouble is even more apparent in a situation where each resident is responsible for maintaining the part of road in front of their home along with the sidewalk. Maintenance is likely to depend on whether or not everyone is doing their job. If not, the logic could easily follow “why should I pay to re-pave my roads if nobody else is interested in doing so?” Many residents in Long Grove are angry, and rightly so, that many roads have fallen under disrepair from lack of attention from the village government. But given the current situation, you could argue a patchwork system of private and publicly owned roads is no different than what is already in place.
To solve that problem, the residents of Long Grove need to ask themselves if this is a question which requires a solution that fixes their small corner of the community, or a solution which addresses the community as a whole.
Some residents already live in gated communities with private roads, which are no doubt kept in excellent shape. The Tribune tells the story of a woman who sees no value in paying for a residential street she will never drive on, but it misses the other factors to consider. A gated community, while isolated, does not exist in complete isolation. Externalities affect the community as well as the value of its property. Well kept infrastructure helps to keep all property values higher, both inside and outside the gate. It is to everyone’s benefit to keep all the roads looking good.
The other elephant in the room is that poorly maintained roads may hint at possible failures in other areas of the village’s infrastructure in the future. Other systems such as water and sewer cannot be as easily privatized on a subdivision-by-subdivision basis. For those, it’s an “all or nothing” scenario where a lapse in service would be more damaging than preventative maintenance.
These are all things that a relatively small property tax could easily handle. It could also fund a nice slush/rainy day fund in case there are emergencies or winters with an unusually high amount of snow fall. All communities are different, but Long Grove must look to find the best solution for both the short and long term. No property taxes was likely an allure that drew people to the community to begin with, but in the long term it is proving difficult to rely on the future of a city with no model for sustaining their existing system of minimal public services.
Fortunately for them it is merely a question of how to pay for it instead of “who will pay for it.” Most places with infrastructure issues face much more difficult and complicated questions.
[1] Census data comes from The 2010 United States Census (Table DP01) and the 5-year estimates from the 2012 American Community Survey (Table DP03)