*** UPDATE *** The Municipal League has updated with correct numbers…

The Governor’s Office is proposing to cap LGDF revenue distributions using State Fiscal Year 2012 as the base year. In other words, cities and counties would not receive any LGDF revenue growth above and beyond what was received in State Fiscal Year 2012. This is absolutely unacceptable!

There is very real discussion among legislators regarding capping LGDF revenue. The IML has had several conversations with legislators who share this view of putting LGDF revenue on the table. The prospect of having to cut spending priorities, such as education, has created a renewed sense of desperation for revenue. THEY WANT OUR MONEY!

The IML received advance notice that the Governor was looking at reducing LGDF revenue by $240 million. Using this number, we estimated that the financial impact would be $18.70 per resident. As it turns out, the $240 million included transfers from approximately 80 funds, including LGDF. The $18.70 estimate based upon that number is therefore too high.

We believe, however, that the Governor’s Office of Management and Budget (OMB) is vastly underestimating the financial impact of the proposed LGDF cap and that our revised estimate is more accurate. The OMB believes that cities and counties would “only” lose $68 million, or $5.30 per resident. Using data from the Illinois Department of Revenue and our own financial projections, we believe that the revenue loss would be approximately $148 million, or $11.50 per resident. Keep in mind that this only reflects the “cap” proposals. Other proposals may surface.

Again, this is absolutely unacceptable.

Local government revenues are further endangered each year that the underlying causes of the State’s financial crisis go unresolved. Legislators and the Governor are chafing at having to make spending cuts to critical priorities like education. This places LGDF at great risk.

We are barely into the first act of what will likely prove to be a long play. We urge our members to consistently remind legislators and the Governor that taking LGDF revenue will not solve the state’s financial problem, but will only create tremendous financial problems for hundreds of local governments throughout Illinois.

They also have a video.

[ *** End Of Update *** ]

* The Illinois Municipal League fired up the mayors with a Facebook post this week…

It’s on! The IML has learned that the Governor’s Office is proposing to reduce LGDF (state-shared income tax) revenue by $240 million. We have also learned that some legislators are supporting the use of LGDF revenue to address the state’s fiscal woes. To calculate the financial impact to each community, multiply the municipal population by $18.70. The IML STRONGLY urges that our members contact their legislators IMMEDIATELY in opposition to this proposed local revenue reduction. The IML will provide additional information as events develop.

Unfortunately, that’s not true. The $240 million is the total number of all automatic transfers that are being looked at by the governors. Local governments’ share of that is much smaller.

* Whatever the amount, the issue has mayors up in arms…

“It’s a classic example of the legislature not being able to take care of their own house and now looking to the cities who have been responsible with their money,” said Normal Mayor Chris Koos.

“This would just compound our own pension issues,” said Lincoln Mayor Keith Snyder.

“Just because the state of Illinois is going down the tubes doesn’t mean he’s got to take the cities down with him,” Marion Mayor Bob Butler said.

Downstate lawmakers say the proposal has mayors throughout the state stomping mad.

* In other budget-related news, Chicago Democrats have for months pushed a plan to shift a half a percentage point of employer pension costs to local school districts a year over a period of several years. The districts have resisted, and their allies in the General Assembly claim the cost shift would lead to property tax hikes.

But the GA cut education funding last year by $210 million, the second straight year of cuts. And the governor has proposed a $278 million cut this year, which amounts to three percent. One reason for the cuts is that state pension costs have zoomed ever higher. From the governor’s budget address…

Without pension reform, within two years, Illinois will be spending more on public pensions than on education.

* The reaction from schools has been predictably intense…

Roger Eddy, a former state lawmaker and school superintendent who now heads the Illinois Association of School Boards, said he’s not sure whether some districts will be able to collect enough local dollars to make up for the loss of state money.

In addition, under a law aimed at capping property taxes, school districts have limits on what they can raise from local taxpayers.

“It’s going to devastate school districts,” Eddy said of Quinn’s proposal.

Bill Farley, assistant superintendent for business operations for Wheaton-based Community Unit School District 200 in DuPage County, said that at some point the cuts have to stop.

“The state continues to whittle away at funding, which was lacking from the start, and it puts more and more pressure on the local community to pay for the education of our students,” he said.

* And…

Sycamore School District 427, already considering eliminating seven positions in part because of lack of state funding, could be out of close to $1 million in general state aid under Quinn’s plan, Glowiak said. Even more funding would be lost with transportation funding expected to be prorated at 19 percent.

“We seem to want to find scapegoats to beat up and the governor and a couple legislative leaders are making the scapegoat the pensions and schools and that’s disappointing,” Glowiak said.

The cut to transportation funding was the main concern for most local school officials, including James Briscoe, superintendent of DeKalb School District 428.

The district lost $300,000 in transportation funding this year, which contributed to a $2.3 million deficit, and is expected to lose even more this coming school year, Briscoe said. The steep cut to transportation almost assuredly means another deficit budget for the district, he said.

* Related…

* Franklin Hospital CEO: State owed $1.3M at end of ’12

* U. of Illinois looks to rely less on state support

* Officials still have hope for Dwight prison

* Quinn’s Bad-News Budget, With Deep Education Cuts, Has Justice Silver Lining