* From the Illinois Policy Institute’s news service…
Cities across Illinois are banding together in an effort to block the state from keeping so much of their sales tax revenue.
Part of the new budget imposed by lawmakers over the governor’s veto is a two percent fee to manage local sales taxes.
The city of Springfield faces mounting pension debt that’s eating up most, if not all, of its share of property taxes. Springfield has seen little growth in sales taxes and now the state is eating up a chunk of that with a 2 percent fee it charges cities to administer sales taxes.
Springfield City Budget Director Bill McCarty said the fee means the city loses out on $800,000 in sales taxes.
“Let’s call it what it is, it’s a surcharge,” McCarty said. “And we’re balancing the state’s budget on the backs of local governments.”
McCarty joins the Illinois Municipal League in pushing for House Bill 4101 that would cut the fee in half.
The Illinois Municipal League lists the bill as key for its members, saying in a policy paper there was no real opportunity for discussion or debate of the fee before it was implemented over a gubernatorial veto. IML also said state law doesn’t allow municipalities to collect their locally imposed sales taxes themselves.
Probably not fair, but something had to give somewhere.
The bill, by the way, has just one sponsor.
* Meanwhile, from the Illinois Policy Institute’s news service…
Other sources from taxes on sales, public utilities, cigarettes, liquor, vehicle use and insurance are either flat or down from the year before.
“I would say the sales tax being up less than 1 percent kind of signifies we’re in a low growth period, which we have been in the last few years,” [Illinois Commission on Government Forecasting and Accountability (COGFA) Revenue Manager Jim Muschinske] said.