* Center Square…
Illinois’ municipalities are, again, on the watch for a potential reduction of their promised share of state revenue if lawmakers choose to use a tool they’ve utilized multiple times before to help shore up the state budget.
The state collects income tax and other types of revenue for municipalities and distributes it via the Local Government Distributive Fund. Until 2011, local governments received 10% of the personal and corporate income tax revenue but that was slashed to 5.45% for personal income taxes and 6.16% of corporate income tax collections to help the state fill a budget hole from the recession. Both of the last two income tax increases saw proportional reductions in the LGDF.
As it stands, Illinois is set to deliver municipalities 6.06% of personal income tax collections and 6.845% of corporate tax revenue but Illinois Municipal League President Brad Cole says that could change.
“We’re always concerned about LGDF as the local share of state income taxes,” he said. “There are only so many places where the General Assembly and the governor can go to make reductions and we’ve seen that LGDF is one that comes out, usually, at the front of the line as a place where they can make cuts.”
Mayor Daley and other mayors publicly opposed the 2011 income tax increase, so municipalities didn’t get a cut of the new revenues. Hey, they said the money wasn’t needed.
So, just saying, but maybe the mayors and county board chairs should start lobbying legislators to pass the governor’s $500+ million decoupling bill because I’m starting to hear that LGDF is where the shortfall could be made up if it fails to pass.