IL Municipal League about Rauner budget: Local govt fund cut would negatively impact citizens

SPRINGFIELD – The Illinois Municipal League issued the following statement in response to Governor Bruce Rauner’s budget address and the proposed 10% cut to the Local Government Distribution Fund (LGDF):

“While we are aware of the challenges with our state’s budget, the proposed cut to LGDF would directly impact core services for all Illinois citizens.  If passed, this budget would disproportionately burden our public safety and public works departments and would likely force communities across Illinois to explore increases to other fees or taxes. Municipal governments have served as good stewards of taxpayer dollars. LGDF is the financial foundation that most communities build from to deal with tough economic times like we’re experiencing now across the state. We are optimistic we can work with the legislature and administration to find a solution that works best for local communities and our state, but does not reduce their statutory funding or place more mandates on their programs and services,” said Brad Cole, Executive Director of the Illinois Municipal League (IML).

The state has already made repeated cuts to LGDF. Prior to January 2011, 10% of total income tax collections were dedicated to LGDF for distribution to municipalities and counties. It was reduced from 10% to 6% following the enactment of the temporary income tax increase in 2011. In January 2015, the percentage share of state income tax revenue subsequently increased to 8% when the higher income tax rates declined, based upon the schedule established by the temporary income tax law. In July 2017, following the permanent increase to income tax, LGDF was reduced, said to be for one year only, to 5.45% of total collections for this fiscal year. The local government share is scheduled to increase to 6.06% in 2019 and thereafter unless the law is altered again.