September 2018 issue www.hbaswil.org To promote, educate and advocate for the Residential Building & Remodeling Industry; providing resources that benefit industry professionals and consumers in the communities we serve. Local Professional Women in Building Councils unite to welcome Judy Dinelle, NAHB 2018 PWB Chair. It was a special day for so many of us to share lunch with Judy Dinelle. Judy has risen thru the ranks of the Building Industry from framing to sales and has many fun stories to share of her experiences. St. Clair County Board approved a $3.5 million property tax levy increase for 2019 The St. Clair County board voted to approve a 5 percent increase to the county’s property tax levy for 2019. The increase will raise the county’s property tax levy to $71.5 million from $68 million, according to the Belleville News-Democrat. Judy Dinelle surrounded by our local PWB members The discussion took many turns and ended on a serious note about workforce development that is impacting not just national but is worldwide. This particular issue is very near to Judy and with her current leadership position at NAHB she is working hard to help bring this to the forefront. Only five of the board’s 29 members voted against the levy hike. Taxpayers in St. Clair County won’t find out what the levy hike means for their own property tax bills until property values are assessed in spring. That’s when the county will decide to what extent it will abate the property tax levy. Continues on page 6 The Village of Glen Carbon Board of Trustees voted in favor of a one-year school impact fee moratorium for single-family new home construction. The moratorium will be in effect for calendar year 2019: January 1, 2019 through December 31, 2019. While a longer moratorium (or more favorably a complete repeal) is ideal, this is a good start and well received by the Home Building community.

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St. Clair County property tax levy increase (continued) Taxpayers in the region need real property tax relief. St. Clair County property taxes have nearly doubled over the past 20 years after adjusting for inflation – an increase that amounts to around $665 per person. It’s not uncommon for home values to increase in tandem with local property taxes, provided that taxing bodies invest revenues in essential government services. This, however, is not the case in St. Clair County, where property taxes have grown more than 200 percent faster than median home values – a rise driven primarily by growing pension costs. Migration patterns indicate taxpayers in the area are tapped out. Between 2016 and 2017, more than 1,300 people moved out of St. Clair County to other counties in the U.S. on net, resulting in a population loss of nearly 650 people. Statewide, the Land of Lincoln has suffered population loss for four consecutive years. When polled, Illinoisans looking to plant roots elsewhere cite taxes as the primary motivating factor. It is a moral imperative that Springfield muster the political will to amend the Illinois Constitution’s pension clause. Without the ability to make sensible changes to future, not-yet-earned pension benefits, taxpayers’ cost of living will continue to spike and government workers’ retirement security will continue to erode. In the short term, however, lawmakers should enable local governments to enroll all new government workers into affordable 401(k)-style defined-contribution plans. Absent serious reform, rising tax bills will continue to find their way to St. Clair County home addresses – or residents will continue finding their way to home addresses outside St. Clair County. Written by Vincent Caruso with Illinois Policy Institute 6


St. Clair County Jan Feb Mar 2014 2015 2016 2017 2018 34 24 33 28 15 42 32 30 44 32 27 39 32 23 35 Madison County Jan Feb Mar 2014 2015 2016 2017 2018 11 11 16 10 21 36 14 19 29 11 24 28 19 20 23 YTD Apr May Jun Jul 25 38 30 38 49 46 34 27 34 34 40 37 27 29 37 16 28 29 29 21 Totals 245 218 240 218 197 YTD Apr May Jun Jul 67 32 30 22 25 21 38 40 21 22 11 22 33 35 27 24 19 19 21 19 Totals 159 205 183 144 149 53 Unincorporated 32 Troy 24 Edwardsville 16 Godfrey 13 Maryville 67 O’Fallon 39 Shiloh 33 Mascoutah 29 Unincorporated 18 Belleville Monroe County Jan Feb Mar 2014 2015 2016 2017 2018 2 12 12 6 6 6 8 8 7 14 8 8 11 10 6 YTD Apr May Jun Jul 13 11 10 9 7 8 11 18 7 7 10 7 16 12 15 15 9 5 11 6 Totals 60 78 86 63 44 21 Columbia 16 Unincorporated 7 Waterloo MarketGraphics provides the HBA with these permit reports. MarketGraphics offers many other housing and subdivision analysis reports. Contact them today to see how that can be of service to you directly. Joe Zanola zanola@zanolaco.com 314.918.7200 www.zanolaco.com 8




2nd Place B Flight Garrett E. & Herschel E. Johnson Real Estate and Development Longest Putt Mick Hunter w/team Copious Technologies Longest Drive & 1st Place B Flight Jordan Schmidt w/team Roofers Mart 2nd Place A Flight Ambassador Floor Poker Run - 4 Aces Helitech Waterproofing & Foundation Repair Skins - Eagle on #14 Jacob Sunroom, Exteriors & Baths 12

ANNUAL Thursday, November 1st 5pm Happy Hour ~ 6pm Trivia Start VFW Post 5691, 1234 Vandalia, Collinsville Trivia & Dinner $25 each Chicken dinner with all the fixings, including 2 FREE drinks Put your useless knowledge to work! 7 rounds of friendly music trivia ~ Prizes for BEST Halloween costumes 1st, 2nd & 3rd Place CASH prize ~ Door Prizes _________________________________________________________________________________________________________________ Primary Contact / Company Name _________________________________________________________________________________________________________________ Phone # / Email Address _________________________________________________________________________________________________________________ Player Names 8 person team ___ $200 METHOD OF PAYMENT: ___ Check Enclosed Individual participants ___ $25 each ___ Invoice Member Company Door Prize Donation ___ ___ Charge to Visa/Mastercard ** credit card payments will include an additional 4% convenience fee Card# ___________________________________________ Exp Date ____________ Signature___________________________________ Cancellation will be accepted 3 days prior to TRIVIA NIGHT . No refunds or credits will be given for cancellations or no-shows. Home Builders Association of Greater Southwest Illinois 6100 West Main St., Maryville, IL 62062 Office: (618) 343-6331 - Fax: (618)343-6335 - Email: hba@hbaswil.org 13

Why Healthcare Is So Expensive Elliot Eisenberg, Ph.D. While there are many reasons why healthcare spending is growing much faster than the economy — including an aging population and the rising cost of prescription drugs — one problem that gets virtually no attention and is a primary cost driver is cross-subsidies. The reason cross-subsidies exist in the first place is because lawmakers want to subsidize healthcare costs for the poor, the sick, and other potential voters — which is well meaning — but lawmakers do not want to raise taxes to pay for these programs. So they hide the taxes they should impose in the form of crosssubsidies. Let me explain. If someone with no money walks into an emergency room and needs care, they get care. But to recover the cost of services provided to the indigent, hospitals must overcharge everybody else. Making matters worse, Medicare and Medicaid do not pay the full amount of their service cost. As a result, hospitals must substantially overcharge everybody else, and that unlucky bunch is patients with private insurance and those who pay cash. Of course, giving free or subsidized healthcare to some by overcharging paying customers is essentially imposing a tax on those who can pay in order to subsidize those who can’t or won’t. But — and this is the key — this hidden tax does not appear anywhere. As such, it is politically costless, and that’s why it is so appealing to politicians. If that were all, it would not be so bad. But it gets worse, much worse. Cross-subsidies are much more inefficient than raising taxes and spending the revenue on, in this case, healthcare. Here’s why. In an ideal market, if a hospital or doctor is going to overcharge some patients, those patients will have an incentive to shop around for a cheaper insurance plan. That insurance plan could be cheaper if it sends patients to hospitals and doctors who don’t overcharge. But if enough such plans were to exist, the entire system would fail because these new low-cost providers would drive the high-cost providers out of business and the poor would not be served. Thus, the introduction of crosssubsidies must be accompanied by a prohibition on competition. One of the ways we see this lack of competition manifesting itself is insurance plans such GraphsandLaughs, LLC as bronze, silver, and gold all offering the same services. And once there is no competition, there is no incentive for any non-competitive service providers to innovate for better care or lower costs, and that, in turn, drives up costs for everyone. If you are old enough, you remember that prior to the 1980s, local phone calls were cheap, often free. That was because long distance calls were very expensive; there was cross-subsidy from long distance calls to local calls. Of course, firms wanted to compete to provide overpriced long-distance calls, but the system would have unraveled. So the federal government gave AT&T a monopoly and, in that way, kept competitors out and prices up. Once there is no competition, be it in telecommunications, airlines, trucking, banking, or stock trading, inefficiencies multiply and prices rise. Returning to healthcare, because of this lack of any meaningful competition, consumers know the cost of nothing they consume and care even less. What kind of market operates well when prices are well hidden? If there were real price competition, consumers would be bombarded with ads boasting of better prices and outcomes and we would all be winners. Increasing taxes and spending, while hardly ideal, sure beats cross-subsidies and the attendant monopolies that drive up costs, prevent firm entry, and eliminate innovation. Until cross-subsidies are eliminated, US healthcare costs will continue to spiral out of control and we will be able to do nothing more than wish for a competitive, innovative and efficient healthcare market. Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at Elliot@graphsandlaughs.net. His daily 70-word economics and policy blog can be seen at www.econ70.com. You can subscribe and have the blog delivered directly to your email by visiting the website or by texting the word “BOWTIE” to 22828. 14


September 2018 Renewed Members Quality Edge. - 1 year Roofers Mart Exterior Building Products –7 years Remodelers Council Srogus Construction Throm Construction Celebrating its 75th anniversary, the show will return to the Las Vegas Convention Center, Feb. 19-21, 2019. 16

2018 HBA Home Show Corporate Sponsors OFFICERS Acting President, Beth Jacob - Jacob Family Enterprises 2nd Vice President, Aaron Klemme - Klemme Construction Associate Vice President, Mindy Shafer - Wells Fargo Home Mortgage 2018 Home Builders Association Platinum Annual Sponsors Secretary, Jerry Yaekel, Jr. - Yaekel & Associates, Inc. Treasurer, Ken Diel - Kerber, Eck & Braeckel, LLP Immediate Past President, Dave Padgett - Padgett Building & Remodeling Co., Inc. 2018 HBA Gold Annual Sponsors DIRECTORS Jason Klein - Ameren Illinois Art Stumpf- AUTCOhome Appliances Michelle Null - Benchmark Title Company Coy Mullenix - CMI Construction Joe Knox - Copious Technologies Joel Keel - Custom Floors & More Robb Treat - Fairway Independent Mortgage Corp. Mark Fulford - Fulford Construction 2018 HBA Silver Annual Sponsors John Snapat, CAPS, CGR - Fulford Home Remodeling Steve Macaluso - Halloran Construction Jon Edler - Henges Interiors Robert Dee Jr. - Homes by Deesign Josh McDermott - J.T. McDermott Remodeling Contractors Jason Huelsmann - New Tradition Homes Ron Padgett - Padgett Building & Remodeling Barbara Markham - RE/MAX Preferred, The Markham Network Ryan Butler - Remington Properties Jeff Schmidt - RLP Development Sue Schultz - Sandberg Phoenix & von Gontard P.C. Mike Rathgeb - Spencer Homes Mark Vogt - Vogt Builders, Inc. 2018 HBA Bronze Annual Sponsors 17

6100 West Main Street Maryville, IL 62062-6688 Office (618) 343-6331 Fax: (618) 343-6335 Email: hba@hbaswil.org WWW.HBASWIL.ORG 18

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