State Legislature considering local revenue grab

On Friday, the Senate Democrats announced their proposed budget for State of Illinois FY 2013.  In it, they call for freezing Local Government Distributive Fund (LGDF) payments to local governments at FY 2012 levels.  If this happens, St. Charles will not share in the 2.53% growth that is expected in income tax collections next year. Instead, the money will be used to balance the State budget.

The Illinois Municipal League estimates that the actual dollar impact of the Senate Democrats’ proposal is $2.06 per capita. For St. Charles, this will amount to a loss of approximately $68,000 in revenue.

Prior to 2011, cities and villages received 10% of income tax revenue based on a per capita formula. Last year, when the State of Illinois increased the income tax rates for individuals and businesses, the amount shared with cities and villages was reduced to 6%. At the time, we were told that municipalities would still receive expected increases on the base amount of income tax revenue collected. Now, there has been a proposal made to renege on the pledge to share the growth in the income tax with local governments.

By freezing the LGDF, the State would be addressing its budget problems at the expense of local governments.  This proposal places a heavy burden on municipal taxpayers and municipal budgets.  It is vital that the State refrain from balancing its budget on the backs of municipalities.  The State must address its own budgetary issues, and not shift its burdens to other levels of government.

St. Charles encourages residents to contact their state representatives and senators to express opposition to the proposed revenue grab. Tell them that we need this revenue to fund important local government services. You can obtain contact information for your state elected officials here.

If you would like more information on this issue, please visit the Illinois Municipal League's website here.