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*** UPDATED x1 *** Question of the day

Wednesday, May 7, 2014 - Posted by Rich Miller

* Back in 2011, several mayors openly opposed the income tax hike plan. As a result of that, and the fact that Democrats wanted to get every state dollar they could get in a very tough time, the revenue from the 2 point tax hike was not shared with local governments.

Things are apparently different this time around

In a May 1 letter to members that was obtained by the Daily Herald, the head of the Oak Brook-based [DuPage Mayors and Managers Conference] urges municipal leaders to support keeping the state’s income tax rate at 5 percent to curry future “political capital” and possibly increase the local share of the income tax revenue.

“More active support would result in even more political leverage on (the Local Government Distributive Fund) and other current and future issues,” the agency’s executive director, Mark Baloga, wrote in the letter. […]

Baloga’s letter indicates the group’s support for keeping the higher tax rate would be “conditional” on increasing the share of income taxes that goes to towns and on direct deposit of that revenue into municipal coffers to end delays in state payments. […]

“It’s a statement of political reality,” he said. “We have heard again and again from our advisers that the extension is likely to happen regardless of anything DuPage Mayors and Managers does or does not do. The best way to protect or enhance those funds is to support the extension.” […]

Meanwhile, officials at the Illinois Municipal League, which also receives taxpayer funding from dues paid by member towns, has publicly announced its support of the tax rate’s continuation, but on the condition that the local share be increased to 10 percent.

* The Question: Should the state share any of the revenue from the 2-point tax hike with local governments if the tax hike is made permanent? Take the poll and then explain your answer in comments, please.


survey hosting

*** UPDATE *** As if on cue, here comes the heat. From a press release…

After facing years of funding cuts, Illinois’ schools could get more than $1 billion in new funding as State Senator Donne Trotter (D-Chicago) is urging his colleagues to truly make education the priority they claim it is.

Currently, mayors and village presidents get a cut of the state’s income tax with no strings attached. Trotter’s proposal ends that giveaway and instead steers the dollars – $1.45 billion in the upcoming budget year – to the state’s public schools in an effort to have the state finally live up to its education funding commitments.

“We cannot afford to ignore the fact that a strong education system is the key to our state’s future, especially with the looming proposition of extreme budget cuts when across the board tax breaks kick in at the end of this year,” said Trotter, a longtime advocate for public schools students. “Money with no restrictions on how it may be used in the hands of mayors and local officials is not a prudent expenditure of taxpayer dollars given the realities we face. If we have to prioritize state funding, I believe that education should always be at the top of our list.”

Existing law takes 6 percent of all the individual income money and nearly 7 percent of all corporate income tax net collections and sends it to local governments. The funding is based solely on population. Need is not a factor.

Meanwhile, Trotter’s plan would reverse the recent trend of the state failing to live up to its own school funding expectations, with the current budget only providing 89 percent of what the state says it should be providing. To help remedy this situation, Trotter’s plan would fill that gap and potentially allow for an increase.

“We face a lot of tough decisions in our budget. In a funding fight between city hall and the classroom, I’m always going to side with the school children. If our students and schools aren’t our top priority then our future is truly in trouble,” Trotter said.

       

27 Comments
  1. - Arizona Bob - Wednesday, May 7, 14 @ 1:17 pm:

    It’s old truism that to get $1 of spending with merit through a legislature, you need to make an additional $9 of unnecessary spending to get that $1 passed into law.

    That sure seems to be proving out regarding this income tax increase!

    The answer is NO. We shouldn’t increase state revenue sharing. If taxes are increased, they should be minimized to only go for unavoidable state expenses.


  2. - VanillaMan - Wednesday, May 7, 14 @ 1:21 pm:

    Absolutely.
    The rules of common thievery demands a fair split of any loot or booty with the ring leader’s portion being equal to two of the other thief’s portion.


  3. - Better Gov - Wednesday, May 7, 14 @ 1:35 pm:

    If passed the state should restore the 10% local distributive share to local governments. This would help hold down property taxes by providing some funding toward paying for unfunded mandates required by the state.


  4. - Ahoy! - Wednesday, May 7, 14 @ 1:43 pm:

    I voted no. I think it would be more appropriate if the State used the funds to pay off it’s bills and get it’s own finances in order. That being said, the State should have a thorough review of unfunded mandates on all units of local governments and at a minimum reduce the unfunded mandates at a dollar for dollar ratio of what the units of local government would have received from the income tax share. That is a minimum, higher savings should be the goal.

    All that being said, I think the State should reduce the income tax a 1/4% a year until it is at 3.75%.


  5. - Bored Chairman - Wednesday, May 7, 14 @ 1:43 pm:

    No. Let them eat cake!


  6. - ejhickey - Wednesday, May 7, 14 @ 1:49 pm:

    No sharing. let local governments enact their own income tax


  7. - the Cardinal - Wednesday, May 7, 14 @ 1:56 pm:

    Yes and they should get restoration to 10% share of the LGDF. if for no other reason to help pay for all mandates the State has shoved down on local governments.


  8. - Jim'e' - Wednesday, May 7, 14 @ 1:56 pm:

    I say yes. The state has continued to increase police and fire pension benefits without providing municipalities with resources to pay for those benefits. On the other hand, the state can keep it all if they cut the police and fire pension compounding cola.


  9. - Demoralized - Wednesday, May 7, 14 @ 2:06 pm:

    No. Local governments can raise their own revenues.


  10. - Capo - Wednesday, May 7, 14 @ 2:14 pm:

    No. The state is broke.


  11. - Ghost - Wednesday, May 7, 14 @ 2:17 pm:

    Yes; it helps secure more uniform distribution of funds statewide with less need to make special projects to try and capture revenue. As cities spend money they help stimulate local economy


  12. - Arthur Andersen - Wednesday, May 7, 14 @ 2:30 pm:

    For once I agree with AZ Bob. No. Local Governments are generally in much better shape than the State and have more options in balancing their budgets. Plus Jim Ardis.


  13. - Walker - Wednesday, May 7, 14 @ 2:59 pm:

    Absolutely NO.

    Not only are local government more flush already than the state, but they waste much more every year than the state ever did. No contest.


  14. - Jimbo - Wednesday, May 7, 14 @ 3:11 pm:

    Perhaps we could send some of that money to airport security. Kidding aside, I don’t understand how robbing Peter to increase Paul’s funding helps the situation at all. Property taxes will be raised to fund schools, or to fund local governments. Silly plan is silly. Or am I missing something?


  15. - Jimbo - Wednesday, May 7, 14 @ 3:14 pm:

    To answer the question though, no. The increase is to keep funding where it is, not to increase local budgets. It is hard to plead poor with new programs, increased budget lines, and a bigger giveaway to locals. Look, if the choice is stable funding for necessary programs or a doomsday budget, I’ll take the stable funding provided by the tax increase. I won’t however take the tax increase if any portion of it goes to increasing spending on unnecessary expenses, like increasing the local match.


  16. - Anonymous - Wednesday, May 7, 14 @ 3:35 pm:

    Local govt depends dramatically on LDGF share, especially non- home- rule towns that can’t just raise prop tax( they have none). The problem is the foolish, lavish spending and the refusal to cut waste and expenses. My gut hurts from Madigan passing $100M for an Obama library when we have NO money. I can save $99m , lets pay Hawaii $1m to take it! The worst state debt in the country - where are the accomplishments from the temporary tax? Did we pay off long term debt? Why not allow 10 gaming machines per location instead of 5 - anyone see the $$ pouring into the Illinois Gaming Board? Www.igb.com- ok the answer is not yes or no- never that simple - local LDGF should be “untouchable” so local govt can maintain services. The State needs to clean their own mess


  17. - WhoKnew - Wednesday, May 7, 14 @ 4:03 pm:

    Said Yes!!

    Monies spent locally are always (let me emphasize ALWAYS) better spent!


  18. - Reality Check - Wednesday, May 7, 14 @ 4:20 pm:

    I vote yes. To all those who said, “let’s local governments raise their own taxes”–a little education is needed. Many local governments are tax capped and cannot raise taxes. The only solution is a referendum. I wonder how many of my neighbors would vote to raise their local taxes to help pay for the pension obligations that the state grants, but for which local government has to pay. Bottom line is that this money comes from me and I would prefer to see it go toward services that directly affect me–not to some unknown expenses of the state.


  19. - Michelle Flaherty - Wednesday, May 7, 14 @ 4:36 pm:

    Reality Check,
    What do you think happens to schools when the state cuts their funding? City Hall isn’t in charge of educating generations of youth but somehow city hall gets priority in the budget?


  20. - Shemp - Wednesday, May 7, 14 @ 4:57 pm:

    Uh, everyone gets that the shared income tax is one of the top funding streams for local police, fire, and public works right? As in, it makes up more than 15% of our local general fund revenue….


  21. - Shemp - Wednesday, May 7, 14 @ 4:59 pm:

    Local governments aren’t in better shape. We have to comply with the State’s rules on everything, particularly non-home rule cities. We can’t change our local pensions, and realistically, are pretty limited in controlling fire and police contract costs due to the interest arbitration setup the State imposes.


  22. - DuPage Bard - Wednesday, May 7, 14 @ 6:15 pm:

    No, if the tax is passed it won’t matter the support or lack of support from Mayors throughout the State. Mayors consistently bash Springfield legislators, increasingly laying blame on State officials for their own budget issues and City issues. So Mayors should get 10% of the pie without any accountability of that funding, wait until the last minute to support the increase and still blame Springfield to their constituents?
    I surely can see the Legislators jumping all over that deal???


  23. - DuPage - Wednesday, May 7, 14 @ 6:25 pm:

    @Shemp4:57

    I would say no. The state police are at about 65% due to state budget cuts. So the state has to cut more state police to give “extra money” to local police. This is not a “cut” of the local kickback, just not increasing it.


  24. - Streator Curmudgeon - Wednesday, May 7, 14 @ 8:21 pm:

    In Illinois, more always means less, except when it comes to debt. It seems easier to vote out incompetent locals than incompetents in Springfield. Better schnooks you can keep an eye on locally than schnooks you have to rely on the media to keep an eye on in the capital.


  25. - Mama - Wednesday, May 7, 14 @ 8:48 pm:

    Yes, but only share a half of a percent for now. Increase the rate down the road when the money situation is better.


  26. - Soccertease - Wednesday, May 7, 14 @ 10:02 pm:

    No. When you are broke you don’t share as much. Since the “temporary” tax increase was not share with locals, why should that change? It’s not like the temporary increase solved all of the state’s financial problems.


  27. - Harley - Thursday, May 8, 14 @ 1:51 am:

    Give cities their full share of the LGDF. They are the unit of government that is closest to the people and the one where residents can see where their tax dollars are spent. Some cities, towns and villages rely on the LGDF to fund as much as 40% of their budgets.


Sorry, comments for this post are now closed.


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