Suburban mayors demand a bigger share of state tax money

Suburban mayors are again calling on Illinois lawmakers to increase the amount of state tax revenue distributed to municipal governments, and they view this legislative session as their best opportunity in years to claw back a greater share of the fundraising cake.

For decades, cities and counties received a share of state income taxes paid by their residents and businesses. But to strengthen its budget, the State, since 2011, has gradually reduced the tax revenues paid to municipalities via the Local Authorities Distribution Fund.

Previously, the state distributed 10% of total income tax annually to local governments. The state currently allocates just over 6% of personal income tax revenue to the local fund, according to the Municipal League of Illinois.

In what has become a familiar refrain, city leaders have sought to restore some funding to help pay for road repairs, retirement costs, flood prevention and other essential services.

But an improved outlook for government finances could change the equation. In his budget speech, Governor JB Pritzker announced that Illinois would end this fiscal year on June 30 with a projected surplus of $1.7 billion.

“Now is the time. Illinois’ economy is strong,” said Palos Park Mayor John Mahoney, chairman of the Metropolitan Mayors Caucus, which represents 275 municipalities.


        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        

The association of mayors has joined a dozen other regional organizations to form a “Restore LGDF” coalition. The group held a press conference on Wednesday to promote their cause.

Chicago-area mayors say they have won broad political support in Springfield for legislation that would raise the local share of income tax revenue to 8%. The bill, introduced by state Rep. Anthony DeLuca, a Democrat from Chicago Heights, has about 50 co-sponsors at the Illinois House.

“We believe this is a reasonable proposal that would provide our communities with greater financial stability and increased ability to meet current and future challenges,” said Highland Park Mayor Nancy Rotering, chair of the Northwest Municipal Conference.

Pritzker addressed the issue last week at Rockford. Since taking office, the state has added “about $1 billion more on an annual basis to city coffers across the state, not through local distribution funds specifically, but through many other things.” , Pritzker said.

The Democratic governor highlighted local tax revenue from legal marijuana sales and the opening of a temporary casino in Rockford. A permanent Hard Rock Casino will be built in Rockford as part of the state’s gambling expansion. Local governments also get more dollars to invest in local roads, Pritzker said.

“But let me be clear, we should always try to do more for local governments because there is so much more to invest in,” he said.

But some mayors say partial restoration of the Local Government Distribution Fund to an 8% share of all income tax revenue would provide a stable revenue stream and reduce reliance on property taxes.

Funding cuts have left the city of Highland Park with a budget hole of more than $2 million a year, Rotering said.

“Those millions of dollars can fix water pipes and roads,” she said. “They can help us mitigate ongoing flooding, which threatens our residents and businesses every year.”

In Darien, income taxes collected by the state and redistributed to the city make up 14 to 15 percent of the municipal budget, Mayor Joseph Marchese said. The proposal to allocate 8% of total state income tax proceeds to the Local Government Distribution Fund would result in an additional $500,000 to $600,000 for the city, Marchese estimates.

“It will be enough to help our communities weather and emerge from this pandemic that we are still living with,” said Marchese, president of the DuPage Mayors and Managers Conference.

Pritzker’s budget plan does not include any proposal to cut current LGDF funding.

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