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Question of the day

Wednesday, Jun 18, 2014

* The Local Government Distributive Fund doles out state income tax money to local governments on a per capita basis. The Daily Herald found, of course, wealthy suburbs whose residents pay a lot of income taxes, don’t get much of that back…

In 2012, each town got $87.85 per person, according to state revenue department records. For residents living in unincorporated areas, the county received those funds, state officials explained.

This state’s income tax redistribution policy means some suburban areas like parts of Aurora got back more than 25 percent of what residents paid in income taxes, while other areas like Oak Brook and Barrington received less than 2 percent of the income taxes workers there paid.

* The Question: Do you support keeping the LGDF based on population or switching to a formula based on a fixed percent of what local residents pay in income taxes, or getting rid of the LGDF? Take the poll and then explain your answer in comments, please.

free polls

- Posted by Rich Miller        

  1. - RonOglesby - Wednesday, Jun 18, 14 @ 2:15 pm:

    I guess I dont know enough about the system, though I would say get rid of yet, then make the locality tax as needed. Why have the state pull it in, only to distribute it (thus taking a cut for administration).

    I would like to see the “Make chicago another state” backers pipe up on this topic.

  2. - wordslinger - Wednesday, Jun 18, 14 @ 2:19 pm:

    If you’re going to do it, keep it as it is.

    I know it’s sacrilege in certain circles, but some taxation is an attempt to narrow the gaps in resources.

    That’s why the good small government folks in Mississippi, Alabama, Louisiana, etc., get back a heck a lot more from the federales than they pay in.

    Barrington and Oak Brook are doing a-ok.

    Speaking of Barrington, the dude who lives across the pond from my sister has put his house up for sale. Keypad locks for every room, panic room, two-story brick doghouse (for many guard dogs).

    Guy has some security issues, lol.

  3. - Disband the IML - Wednesday, Jun 18, 14 @ 2:26 pm:

    LGDF should be gotten rid of along with the IML that has become nepotism-ridden under Eisenhauer.

  4. - Ducky LaMoore - Wednesday, Jun 18, 14 @ 2:27 pm:

    Why would you change it? The cost of roads, water, sewers etc doesn’t change with how much income taxes are paid in any given municipality.

  5. - Wensicia - Wednesday, Jun 18, 14 @ 2:28 pm:

    Keep it as is; it’s hardly harming the people who need this benefit the least.

  6. - DuPage - Wednesday, Jun 18, 14 @ 2:29 pm:

    Get rid of it, but only if the funds go to the 5 state pension funds.

  7. - OneMan - Wednesday, Jun 18, 14 @ 2:30 pm:


    It would appear there is good money in the dancing arts…

    To the question, kind of interested in what it means about ‘parts of Aurora’, did they break it down by neighborhood? Because I highly doubt it is that high in my neck of the woods…

  8. - G'Kar - Wednesday, Jun 18, 14 @ 2:31 pm:

    I did not vote as I am not clear on the concept. I would support what ever system gives more help to poorer communities, especially down state.

  9. - A guy... - Wednesday, Jun 18, 14 @ 2:38 pm:

    Keep it. It’s a mechanism designed to do exactly what it is doing. Some towns benefit more than others. The ones that do, can use the assistance. The ones that don’t are doing just fine. It’s probably much better than the distribution formulas the legislature lords over. Let it be.

  10. - Gathersno - Wednesday, Jun 18, 14 @ 2:38 pm:

    Keep it as because it is based on need. The richer ones can afford to help the poorer ones.

  11. - A guy... - Wednesday, Jun 18, 14 @ 2:41 pm:

    === wordslinger - Wednesday, Jun 18, 14 @ 2:19 pm:
    Barrington and Oak Brook are doing a-ok.
    Speaking of Barrington, the dude who lives across the pond from my sister has put his house up for sale. Keypad locks for every room, panic room, two-story brick doghouse (for many guard dogs).

    Guy has some security issues, lol.===

    Slinger, all you had to do was ring my Carillon. I’d have given you the punch code for the 3 entry doors, locked up the Rotts and Dobies and greeted you with a very warm smile. lol

  12. - Mister Whipple - Wednesday, Jun 18, 14 @ 2:43 pm:

    Get rid of it. Do as Indiana does. Every county has an income tax as do many municipalities. If the thought is the most responsive government is local government, let the locals decide what they need and how to raise it.

  13. - zatoichi - Wednesday, Jun 18, 14 @ 2:47 pm:

    Just leave it alone. I do not think Oblong, Paris, or Pittsfield are going to be knocking Barrington or Oakbrook off the top of the money charts soon. Roads, bridges, schools, water systems, sewage and related stuff is still needed across the state. Some areas of the state will never have the population/economy to do these things well on their own.

  14. - railrat - Wednesday, Jun 18, 14 @ 3:03 pm:

    rid this and some township govt. entities, at least show the citizens an attempt of some type of relief!!!

  15. - Mayor Dave - Wednesday, Jun 18, 14 @ 3:11 pm:

    It should be proportional to the amount paid in by local residents. The state is already redistributing much of the other 94% to poorer communities as it is. A per capita distribution of the LGDF amounts to a double income redistribution.

  16. - Common Cents - Wednesday, Jun 18, 14 @ 3:23 pm:

    Under the % of income tax paid concept the dis advantaged communities become even more disadvantaged

  17. - Precinct Captain - Wednesday, Jun 18, 14 @ 3:24 pm:

    Is it working for its designated purpose? It is, so keep it as is. There is a reason the state of Illinois takes a statewide view of things. Sometimes that statewide view means helping our less able communities.

  18. - Norseman - Wednesday, Jun 18, 14 @ 3:34 pm:

    Keep current system. Wealthy communities are in a much better position to support their government services than lower income communities. Higher property tax proceeds, sales tax, etc.

  19. - Illiana - Wednesday, Jun 18, 14 @ 3:39 pm:


    It is rare for you to quote an article & not link to it. Half surprised no one mentioned the missing link yet.

    On the poll, I would say “Change to percent…” is clearly the worst of the three options. Costs do not change just because tax collections differ. Indeed for those of us downstate, this is probably a benefit to sharing a state with Chicagoland. I can see cogent logic in the other two, but really it is good enough that messing with the Local Government Distributive Fund methodology should be very low or absent from anyone’s priority list.

    Also from the article Arlington Heights Republican David Harris put it nicely “To my mind, it’s a fair way to do it now. I don’t want to go complicating the formula. The more complicated the formula gets, the more people play games with the money.”

  20. - DuPage - Wednesday, Jun 18, 14 @ 3:39 pm:

    @Gathersno2:38=Keep it as because it is based on need.=
    It is based on population. I have seen a lot of this money spent on things that were not really necessary. Local officials tend to look at it as “free money” and feel less accountability then if it was local tax dollars. It tends to be spent on wants instead of needs. When some of these spending items are questioned by local taxpayers, they are told it was paid by state dollars not local tax dollars. A lot of these towns could tighten their belts.
    The state is paying out this money and at the same time says they can’t pay the pension funds, can’t pay to fix the roof or the sump pump. Time for the state to end the LGDF and use the state tax money for state needs.

  21. - Charlie Wheeler - Wednesday, Jun 18, 14 @ 3:45 pm:

    Historical note

    Revenue sharing– the LGDF– was a key element of the 1969 compromise negotiated by Gov. Richard B. Ogilvie and Chicago Mayor Richard J. Daley that provided needed Democratic votes in the Senate and the House to approve legislation creating the income tax. Ogilvie had mentioned sharing some of the new income tax receipts with local government in his 1969 budget address, in which he proposed the tax. The negotiations between the two leaders resulted in local governments receiving a one-twelfth of share of income tax receipts, distributed on a per capita basis.

    Negotiations tied to later income tax rate increases resulted in a one-tenth share to the LGDF; since January 31, 2011, the local government share has been 6 percent of individual income tax proceeds and 6.8 percent of corporate income tax proceeds.

    Charlie Wheeler

  22. - Anonymous - Wednesday, Jun 18, 14 @ 3:48 pm:

    Keep it; given the ‘unfunded mandates’ Springfield imposes on local agencies, give them something. And these regulations are passed to all munis, large or small.

  23. - Michelle Flaherty - Wednesday, Jun 18, 14 @ 3:51 pm:

    Reminds me of the Replacement’s line …
    The rich are gettin richer, and the poor are gettin drunk …

    Abolish it, impose a corresponding reduction in the state tax rate, and give each muni the ability to impose an income tax if the locals are so enamored with spending income tax money. I’m sure Rep. Harris will gladly sponsor the plan.

  24. - dreamer - Wednesday, Jun 18, 14 @ 3:52 pm:

    Best to leave it the way it is now. If the formula were switched most local roads outside Chicago and the suburbs would be gravel or dirt.

  25. - lake county democrat - Wednesday, Jun 18, 14 @ 3:54 pm:

    “The rich get richer, the poor get the picture.” - Midnight Oil

  26. - Diogenes in DuPage - Wednesday, Jun 18, 14 @ 3:55 pm:

    A regressive tax doesn’t deserve a progressive tweak.

  27. - SAP - Wednesday, Jun 18, 14 @ 3:56 pm:

    Keep it. Wordslinger nailed it. For those who propose replacing it with a local income tax, be careful what you wish for. Letting local governments impose their own sales taxes has made the sales tax code much more complex. A local income tax would make that look like child’s play.

  28. - the Other Anonymous - Wednesday, Jun 18, 14 @ 4:10 pm:

    The argument underlying a switch in distribution from per capita to a proportion a tax paid is based on this idea that somehow I should personally get in government services the exact amount I put in. The argument seems to be that if I pay $1 on taxes, that money has to expended in a way that allows me to get exactly $1 in services.

    If one really believes that, then why have government at all?

    The point is that one thing that government does that no other entity can do is provide services based on need instead of ability to pay. And yes, that means that some people will pay taxes and not receive a benefit back in the exact amount.

    To me, that seems like a good thing, especially when the tax dollars flow to communities in need.

    IMO, this is a bogus issue designed to stir up populist envy amongst the very people who have the least reason to envy others.

  29. - BW - Wednesday, Jun 18, 14 @ 4:12 pm:

    I would look for the State to re-allocate the Personal Property Replacement Tax before the LGDF. It makes no sense to distribute funds based on what businesses your local government had 40 years ago.

  30. - Taxguy - Wednesday, Jun 18, 14 @ 9:32 pm:

    Why change it? You are taking a percentage of the Illinois Income Tax and distributing it to all communities based on population.

    It’s efficient and seems fair. Every city or county gets an amount based on population.

    Its okay if the folks in Barrington see some of their taxes go to Aurora or Dolton.

  31. - Ahoy! - Thursday, Jun 19, 14 @ 9:21 am:

    I voted to keep it as is. I would vote to get rid of it as long as their were guarantees of mandate reduction that would save more than the revenue being lost. This would be a win-win since the State could keep the revenue and for the local government would get more savings than revenue lost.

    I would not favor having it as a percentage of income. If that is the case, do away with the fund and allow municipalities to implement local income taxes.

Sorry, comments for this post are now closed.

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