By now, you probably know about the over funding for Regional Offices of Education (ROEs) in Illinois. The State of Illinois is attempting to determine the importance of these offices and the regional superintendents that operate them. The state is also attempting to find a source of money to fund the offices. While this issue may not appear all that important to residents of , any dispute over financial issues in state government could impact us.
Currently, the state is considering reducing revenue to local governments as a means to pay for the ROEs. Such a diversion would mean that the state is using local government revenues to pay for a financial obligation of the state.
Corporate Personal Property Replacement Tax (CPPRT) taxes are collected by the state on behalf of local governments. The revenue is used to replace money that was lost by local governments when our power to impose personal property taxes on corporations, partnerships, and other business entities was removed. This revenue stream was created when the new Illinois Constitution directed the legislature to abolish business personal property taxes and replace the revenue lost by local government units and school districts.
It has been reported that HB 3828 would amend the State Revenue Sharing Act to add "regional officials and local officials" to a section that authorizes CPPRT payments to taxing districts. We believe this would allow the diversion of the city's portion of the CPPRT in order to pay the state’s 44 regional school superintendents and expect this legislation to be addressed during the fall veto session.
The City of St. Charles strongly opposes any diversion of state-collected municipal government revenue to pay for the salaries and benefits of ROEs.
Annual revenue raised by CPPRT taxes over the past several years has varied from $1 billion to $1.5 billion per year statewide. According to the Illinois Department of Revenue, the total estimated amount of CPPRT allocations for FY2012 is $1.221 billion. Municipal governments receive 20% of CPPRT money on a statewide basis. St. Charles received approximately $90,000 in CPPRT revenue in FY 2011 and is expected to receive approximately $80,000 in FY 2012.
Any loss of revenue for the city will have consequences. Just as the state is facing a budget crisis, communities have had to make tough choices to balance their budgets. Municipalities have already reduced their expenditures commensurate to the decline in tax revenues that all jurisdictions have experienced. We believe the State of Illinois needs to do the same, without taking our share of the CPPRT funds.
I encourage you to contact your state legislator and tell them to leave the city's share of CPPRT revenue intact.