Lawmakers look to divert scarce state funds to cities, counties

Illinois has not had a budget since June 2015, and court-ordered spending had the state government spending $8 billion more than it took in last year. In spite of that, the House passed a bill this week, in a party-line vote, that would pull another $300 million out of the state’s coffers annually, with little discussion on how to pay for it.

The state of Illinois gives city and county governments a portion of its individual and business income tax through the Local Government Distributive Fund, or LGDF. Democrats in Springfield are pushing to send more state income taxes to local governments. Republicans say the money could be used on more pressing needs.

The bill by State Rep. Anthony DeLuca, D-Chicago Heights, would boost the percentage, increasing the amount the state sends by $314 million every year. The current fund is around $1.3 billion. He says the state’s local governments are struggling to get by on what they have.

“They’re suffering,” he said. “Trying to provide police and fire protection is the most costly service that they provide.”

“Where do we find the money for this? Anthony, we’re broke,” said Rep. Steven Andersson, R-Geneva.

Andersson said the state shouldn’t be sending local governments more money when the state needs to fund its core social services first. “We’re prioritizing this over autism funding, at-risk youth, breast cancer screenings. Those things are all important, and we could use the millions and millions of dollars I just quoted for those items.”

In 2011, the state cut the portion of income taxes it sent to local governments from 10 percent to 6 percent. The idea was that cities wouldn’t gain or lose money when the state raised income taxes in 2011, and it would be raised back to 10 percent in 2025 when the income tax fell back to pre-increase levels. DeLuca’s bill would accelerate that timetable.

Currently, 8 percent of Illinois’ income taxes are redistributed to municipalities based on population in proportion to the state. The LDGF holds approximately $1.3 billion. The Illinois Municipal League says cities and counties get around $100 per person living in their jurisdictions.

Proponents of the LGDF say it helps keep local taxes low. But Illinois’ municipalities are, for the most part, reliant on property taxes for their main source of income, to which residents already pay some of the highest rates in the country.

The bill needs a Senate vote and governor’s signature to take effect.

–Illinois News Network

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