From the Illinois Municipal League
SPRINGFIELD – Governor Bruce Rauner has proposed a 50 percent cut in the municipal share of state income taxes known as the Local Government Distributive Fund (LGDF) that would take effect in July 2015 if passed by the state legislature.
The Illinois Municipal League (IML), which represents all Illinois mayors, is committed to fighting this huge LGDF reduction as the organization is greatly concerned about the burden this will bring to communities across the state. Many mayors are talking big tax hikes and significant cuts that could affect public safety to offset the LGDF cuts.
Leaders across the state are trying to figure out how they’d manage their budgets with the LGDF cut that would mean significantly less funding for the areas they serve. Rockford is expected to take a hit of $7.56 million and nearby Rockton of $380,408 to their respective general funds.
“This proposed cut is already creating a great amount of distress in municipalities across Illinois,” said North Chicago Mayor Leon Rockingham. “Gov. Rauner’s proposal assumes all municipalities are on the same playing field, and they are not. Here in North Chicago, we are home to many important federal entities and these entities are exempt from property taxes.
“The $1.6 million that would be cut from our city to fix the state’s problems will negatively impact service delivery and potentially increase property taxes on an already overburdened constituency. Worse yet, it will hijack our economic development initiatives which will have grave consequences on our residents, military community and region.”
In proposing to cut state revenue sharing with municipalities, Gov. Rauner suggested that some municipalities should be able to sustain this cut because they have a substantial amount of money in reserves. Mayors across the state who maintain reserves say those funds are there for emergency use as part of prudent fiscal management.
“Municipalities that are fortunate enough to have reserves on hand can’t necessarily use them for general funding purposes such as police, roads and parks,” said Mascoutah Mayor Jerry Daugherty, president of the IML Board of Directors.
“Most municipalities have managed their funds effectively and dealt with a number of unfunded state mandates through the years. And now a proposed 50 percent cut is what we get-this is our reward? This doesn’t seem fair.”
So far, approximately 160 communities have adopted the IML resolution opposing LGDF cuts, and there have been nearly 4,000 emails/letters sent through the IML website to the administration and legislature on the same issue.
Brad Cole, executive director of IML, says they’re seeing dire budgeting scenarios in municipalities across the state. “We are keenly aware of the budget challenges facing the state, which is why we are working closely with the governor and General Assembly.
“But we think the proposed cuts are misguided. Municipal governments have been good stewards of taxpayer dollars, and many of them have kept rainy day funds to deal with tough economic times like we’re experiencing now.
“The reality is that when fewer dollars are returned to local governments, we can expect layoffs and a ripple effect with local police and fire personnel.
“Municipalities are optimistic we can work with the legislature and administration to find a solution that works best for local communities and our state.”
Illinois municipalities have partnered with the state to maintain the LGDF since 1969 to fund core municipal services such as police, fire, roads, sidewalks, planning, zoning, public safety, water, sewer, public works and snowplowing, helping to keep local tax burdens lower.
Without LGDF, communities across the state would need to explore cuts to core services or increases to local taxes, even though Illinois taxpayers are already burdened with higher property taxes than most states.