* State Sen. Kyle McCarter (R-Lebanon) talks about tackling the state’s $6 billion Fiscal Year 2016 budget hole…
McCarter said his focus is on eliminating waste and fraud, and believes the cost savings from those cuts will offset the pain from the budget cuts. […]
McCarter said the state can’t borrow more money and shouldn’t raise taxes. […]
As far as the students’ concerns about the impact of a 30-percent funding cut to SIUE, he said he believes more students attending will make the difference. […]
To get out of the budget crunch, McCarter said, Illinois’ culture is going to have to change. He said he believes the state should not provide welfare programs — that it is the job of churches and private organizations to care for the needy.
In Illinois, McCarter said, they have created an “entitlement culture” that has “enslaved millions.” Instead, he said, he’d like to see tax incentives for private organizations to take up the role of government in caring for the needy.
In Indiana, he said, they dealt with budget problems by shutting down all rest areas for a year and stopping all services at driver’s license facilities that could be provided via the Internet.
Undefined waste, no tax hikes, a hoped-for student population explosion, abdicating service to the most needy, and closing down rest areas.
* Meanwhile, from the Illinois Policy Institute…
A behind-the-scenes budget battle is brewing over a proposal that would limit the amount of money siphoned from Illinois taxpayers to fill local government coffers. The Local Government Distributive Fund, or LGDF, takes a portion of Illinoisans’ state income taxes and then sends it to counties and municipalities.
As a result of this system, there are some clear winners and losers. That’s because the LGDF doles out money to counties and local governments based on population. In fiscal year 2014, the state took $1.25 billion in income-tax revenues – which was the equivalent of 6 percent of total income-tax revenues – from taxpayers to send to 102 counties and 1,298 municipalities in Illinois.
The state collected almost $103 million in personal income taxes from DuPage County taxpayers for the LGDF fund. But municipal-level governments across the county plus the county government received a combined total of just under $81 million in LGDF payments, according to the Illinois Department of Revenue.
That means DuPage County gets back just 79 cents for every dollar it pays into the LGDF. While DuPage County receives a smaller proportion of LGDF funding than its taxpayers contributed, other counties across the state receive more than their taxpayers contributed.
The Institute’s solution? No, it’s not about basing revenue sharing on per capita revenue.
* It’s this…
A recent proposal by Gov. Bruce Rauner would be an important first step in eventually doing away with this scheme and allowing Illinoisans to keep more of their hard-earned income.
The state income-tax rate is 3.75 percent (down from 5 percent in 2014) while the amount distributed via the LGDF is the equivalent of 8 percent of total income-tax revenues (up from 6 percent in 2014). Instead of putting 8 percent of state income-tax revenue into the LGDF, the governor’s proposed budget would distribute 4 percent to counties and municipalities.
No one wants to see their budget cut, but the state’s fiscal crisis is not going to leave any area of government immune from belt-tightening. This proposal represents an average amount equal to a 3 percent reduction in counties’ total general-fund budgets, but it also sets the stage for devolving power from Springfield back to units of local government.
In tandem with LGDF reform, local governments should insist upon reducing the burden of unfunded state mandates, more control over property-tax rates and other local tax rates, and generally returning more control to local governments – where they rightfully belong.
So, lemme get this straight. Slash their revenue sharing, freeze their local property taxes (as Rauner wants, but is not mentioned above), trim their unfunded mandates and that somehow means power will magically “devolve” from Springfield back to local government and they’ll have more control over their local property tax rates - which were frozen by the state?
Look, times is tough all over. I get that. Local governments may very well have to take a hit. But nobody will ever convince them that taking away their state revenue sharing dough is a good thing, long term or short term - even with the reverse class warfare rhetoric.