City Fears Loss of Funds from State

An idea floated by to further delay state income tax revenue due to municipalities has run into a storm of criticism from city and legislative leaders amid fear local governments could lose their share of the tax. 

Under current law, one-tenth of all income tax collected by the Illinois Department of Revenue is paid to the state’s municipal governments on a per capita basis, according to . 

“This is not aid from the state, the state just acts as a collection agent,” Limardi said.

The amount of money flowing to Highland Park and other towns has been declining with the economic downturn and the state is taking longer to pay. 

According to information provided by the , an organization of 42 communities in the northern and northwestern suburbs of Chicago that includes Highland Park as a member, Quinn is putting the payments due .

This can be a problem when cities like Highland Park assume that money will be recieved while preparing its annual budget.

Kelly Kraft, a spokeswoman for the Illinois Department of Management and Budget, indicates there is no proposed legislation to suspend or curtail the local government distributive funds (LGDF), which is the term for the municipalities' share. 

“We floated an idea about whether delaying the payments would help us meet other obligations that are six, nine or 12 months late,” she said. “I don’t know what the mayors are referring to. It may be the Senate Republican proposal to cut the fund $300 million.” 

Some Republican members of the state Senate talked about reducing the local government distributive funds by $300 million, but no legislation to advance the idea is before the General Assembly from either party. With a May 31 deadline looming for passage any such law as the legislative session winds down, Kraft does not think it will happen. 

wants to be sure the city retains its share of the funds. She has been personally lobbying and . She spoke publicly at a town hall meeting Garrett held recently in Highland Park. 

“We have made cuts and worked hard to pass a balanced budget in Highland Park,” Rotering said. “The state should not be solving its budget crisis on the backs of the municipalities.”

As it is, the local share has dropped from $92 to $74 per capita because the state is collecting less tax revenue, according to Limardi. 

Highland Park has allies in Springfield. Both Garrett and May has promised to resist any effort to eliminate the local governments' share of the income tax. 

“I will support keeping our municipalities 100 percent whole on the LGDF,” Garrett said. 

According to May, the budget passed by the Illinois House of Representatives leaves the funds intact. 

“I oppose the cuts to local governments, and was pleased that the version of the budget that has been passed by the House did not include those cuts,” May said. “I will continue to fight to preserve those funds as we continue to negotiate the budget with the Senate and the governor.” 

Just to be sure its voice was heard, the Highland Park City Council unanimously passed a resolution at urging the state to leave the city’s share of the state income tax untouched.