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Most suburban towns could survive a year of state cuts

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Illinois

* The Daily Herald took a look at municipal reserves in 90 suburbs…

Already in the red by nearly $200,000, [Island Lake] would lose $400,000 more next year if Rauner’s [revenue sharing cuts are] implemented by the legislature.

“In 2014, the village reduced the deficit but still did not eliminate it. The village still remains insolvent,” said Ed McGinty, the village’s treasurer. “Any reductions in revenues will result in more cuts to local people and services.” […]

On average, the 90 suburbs would use up a quarter of the reserves to cover the loss of income tax revenue in the first year, according to the analysis. […]

The Government Finance Officers Association recommends reserves be kept at a minimum of two months of spending, or roughly 17 percent of annual spending. The state does not mandate any levels.

The reserves of the 90 suburbs analyzed averaged 60 percent of annual expenses. Besides Island Lake with its deficit, only West Dundee, Aurora and Hampshire reported reserves below the minimum suggested threshold. Hampshire reported reserves of just 1.1 percent of the village’s annual expenses last year. Four more towns — Antioch, Barrington Hills, Carpentersville and Prospect Heights — could drop below two months of reserves after an initial year of income tax cuts.

The rest were in pretty good shape. Go read the whole thing. Downstate, however, could be a very different story. And towns already in fiscal trouble which also aren’t home rule units would be hit particularly hard.

* Related…

* Rantoul would lose more than $600,000 a year under governor’s proposal: Bennett said the county of Champaign would be hit, too, under Rauner’s proposal — losing $1.5 million. Two other villages in Rauner’s district that are in the Press’ coverage area would lost substantial funds. Gifford’s payment would decline from $92,948 to $46,474 a year, and the village of Thomasboro’s from $107,342 to $53,671 according to Bennett’s figures.

* Ottawa opposes Rauner tax grab

* Thomasboro formally opposes governor’s resolution to cut money to local government: Mayor Brad Morris said if the governor’s proposed budget went through, the village would stand to lose more than $55,000 from the state. Morris did say the money was a luxury for Thomasboro but not for other small communities around Illinois.

* Mayors Call On Rauner To Rethink Plan To Cut Local Government Revenue: On Monday, the Arlington Heights village board approved a resolution opposing the proposed reduction in local governments’ share of income tax revenue. Groups representing mayors and local government officials, like the Will County Government League, also oppose that portion of the budget proposal, and have sent a letter of opposition to the governor. Steve Quigley, executive director of the Will County Government League, said local governments in Will County would stand to lose more than $55 million.

* Skokie mayor: Rauner budget would force tax increase or cut in services

* State superintendent warns of ‘perfect storm’ for districts: State Superintendent Christopher Koch told a House appropriations committee that the numbers of low-income and minority students are growing while budget cuts force districts to cut staff and eliminate various programs.

* Mixed feelings on budget cuts: Although Gov. Bruce Rauner’s proposed budget includes $300 million in education funding, [Ashton-Franklin Center School District Superintendent John Zick] said AFC would only receive $27,000. Factor in the lost of student enrollment, and the district would only get an estimated $12,000. “$300 million sounds really good, but we would only get a small piece of that pie,” Zick said.

posted by Rich Miller
Wednesday, Mar 4, 15 @ 11:00 am

Comments

As a former Arlington Heights resident, it is a little funny to see such adamant opposition from a population which supported Rauner. Everybody loves the sound of cuts until it happens to them. What happened to the bedrock of conservative principles?

Comment by Wisconsin Democrat Wednesday, Mar 4, 15 @ 11:10 am
We will continue to see the drumbeat of “don’t cut me” but no suggestions of what to cut.

Comment by ANON. Wednesday, Mar 4, 15 @ 11:11 am
So Ashton Franklin is serving fewer students, and they’re complaining that they’re “only” getting $27,000 in “extra” money.

Sorry, Superintendent Zick. It may not be the way the patronage driven public school system in Illinois likes to operate, but you need to cut instructional staff and administration when you’re serving fewer students to meet your revenues.

Tough having to deal with things like we do in the “real world”, huh?

Comment by Arizona Bob Wednesday, Mar 4, 15 @ 11:12 am
Plenty of pain to spread around, no one should be immune.

Just make sure the property tax is capped..

Comment by plutocrat03 Wednesday, Mar 4, 15 @ 11:15 am
The thing about cuts is that the pain falls almost exclusively on the poorest among us. Where’s the shared sacrifice Rauner mouthed actually occurring when no revenue increases have been proposed?

Comment by PublicServant Wednesday, Mar 4, 15 @ 11:20 am
Despite Rauner’s promises, this sounds like Kansas all over again.

Comment by Juvenal Wednesday, Mar 4, 15 @ 11:23 am
That “Mayors for Rauner” will just get smaller and smaller…

Hey ILGOP GA;

When the members go back to their mayors for support, what will they say?

“Bruce told me to cut you off”

Mayor Sandack at least stood for something, the Owl Sandack will cow-tow to Uihline.

Comment by Oswego Willy Wednesday, Mar 4, 15 @ 11:24 am
I have a hard time thinking of another high ranking elected official who’s “honeymoon” period after the election was any shorter than Rauner’s.

Comment by Stones Wednesday, Mar 4, 15 @ 11:25 am
I’m sure there are a lot of folks who are regretting what they asked for last November.

Comment by Norseman Wednesday, Mar 4, 15 @ 11:25 am
Because municipalities have been better stewards with tax dollars than the state, I’m not sure why their reserves should get whacked. If, on the other hand, the state would forgo their continuing habit of passing along unfunded mandates(i.e. minimum manning as a mandatory subject of bargaining) perhaps the municipalities would find a reason to accept the proposed haircut.

Comment by Tommydanger Wednesday, Mar 4, 15 @ 11:37 am
– Because municipalities have been better stewards with tax dollars than the state, I’m not sure why their reserves should get whacked. –

Well, because they have the money, of course. Or does that rationale only apply to raising taxes on “the rich?”

Comment by JB13 Wednesday, Mar 4, 15 @ 11:40 am
===Despite Rauner’s promises, this sounds like Kansas all over again.===

And cuts, being contractionary, will cause the Illinois economy to _____________? Please fill in the blank Ms. Arduin, so we have you on record.

Comment by PublicServant Wednesday, Mar 4, 15 @ 11:42 am
=So Ashton Franklin is serving fewer students, and they’re complaining that they’re “only” getting $27,000 in “extra” money.=

Umm AZ…. that is not “extra money”. GSA funding, mandated by statute, have and continue to be funded at 89% of actual entitlement. The governors proposal would only fund GSA at 95% of the required level. Still not funded at what should be coming from the state based on the formula. the foundation level, another number set by statute, has not changed since FY 2009 and reduction of entitlement has been going on for 5 years. In inflation adjusted dollars, the underfunding is closer to 20%. Annually. Even though Rauner promised to fully fund schools the under funding continues. It is happening to everyone, I get it, but he promised, he is different, his words count. Right?

Get your facts straight. Dope.

Comment by JS Mill Wednesday, Mar 4, 15 @ 11:45 am
>I have a hard time thinking of another high ranking elected official who’s “honeymoon” period after the election was any shorter than Rauner’s.

No other high ranking elected official has declared war on the state’s most vulnerable (women, children, the disabled, etc) as quickly as Rauner has.

Comment by Leroy Wednesday, Mar 4, 15 @ 11:53 am
There’s no question this is a blow to munis who have been budgeting this line of revenue since 1969. At the same time, it’s been openly discussed for at least the past 6 or 7 years, with vehement defense from mayors and administrators. In most places, it would seem there would be some planning going on for the possibility of this actually happening.

When you’re a local official, your very first obligation is to provide public safety. Everything else comes after that; utilities, land development, civic events, etc.

Where the Mayors lose some credibility is saying the first thing they’re going to have to do is ax cops, firemen and paramedics. Really? It’s the first thing you budget for and the first thing you cut?

There’s a great case to be made, but when they react like this, it rings hollow after a while, especially if they are sitting on reserves of 25%+. Some places even closer to 50%. I don’t really know about downstate, but it seems they would be hurt more by this.

Everything’s on the table and I have a feeling this one is going to get a lot more play now than ever before. Seemed like there were plenty ready to go after it before. Things are more dire now and there are a lot of cuts that seem to sting more than this one. It’s a big pot as a total that’s quick to access. Those are the ones to watch.

Comment by A guy Wednesday, Mar 4, 15 @ 11:59 am
=== At the same time, it’s been openly discussed for at least the past 6 or 7 years, with vehement defense from mayors and administrators.===

Is that the President Cullerton stuff?

Rauner’s $20 million can be $200 million when those mayors turn on ILGOP GA members.

Comment by Oswego Willy Wednesday, Mar 4, 15 @ 12:16 pm
I don’t think so OW. But I don’t want to argue the point. While, I don’t agree with the Mayor’s Chicken Little act at times, I’d like to see this area not get cut. The town I live in has been planning for the eventuality of it.

Mayors aint what they used to be. I’ll agree you’re partially right, but not 10x right.

Comment by A guy Wednesday, Mar 4, 15 @ 12:25 pm
- A Guy -,

Mayor Sandack would have railed on Rep. Sandack.

That really says why I went 10x.

Those mail/walk pieces without Mayor’s support, it gets cold out there…

Comment by Oswego Willy Wednesday, Mar 4, 15 @ 12:30 pm
Did everybody think balancing the State budget was going to be a painless process? Geesh. I get the concerns of municipalities, prisons, social services, education, etc. And I’m sure everyone can come up with better sources for reductions than Gov. Rauner. But it seems there must be some pain to get Illinois back on course. Someone’s ox is going to get gored.

Comment by Diogenes in DuPage Wednesday, Mar 4, 15 @ 12:47 pm
Cutting services is much different than cutting essential services. Many of these communities can cut spending, without cutting essential services. The first thing they can do is cut salaries and have employees pay more for their often very generous health, sick days, and allowances.

Comment by Apocalypse Now Wednesday, Mar 4, 15 @ 12:58 pm
@JS Mill

=GSA funding, mandated by statute, have and continue to be funded at 89% of actual entitlement. The governors proposal would only fund GSA at 95% of the REQUIRED level.=

So if your point is that Rauner is “required by statute” to fund at the EFAB level, you’re saying that Rauner can’t make the reductions legally. That’s flat out wrong, DOPE. The fact is that the EFAB funding levels are advisory, not required for funding by the GA. You do know that the EFAB committee is made up of five members, three of which are from the teachers unions and typically one from the education entitlement culture. SOMETIMES the fifth seat is a member of the business community, but they’re ALWAYS willing to play ball and do things the education lobby wants. The Governor appoints the committee, so it’s entirely political. One of the key points of unfairness in the PTELL laws (you do know what they are, right?) is that there is no reduction in the tax levy to adjust for lower enrollment. Only state and some Federal funds are affected due to “per student” funding formulas. In fact, no matter how much enrollment drops, overall real estate tax revenues increase by 5% or COLA, PLUS new construction coming on the tax rolls, even if property values drop substantially. So Super Zick gets more money from the taxpayers to educate fewer students. This should be changed to be more fair, don’t you agree Percival?

The scary part of your rant is that its likely you’re on some school payroll, and you choose to mislead about the facts and reality of application in school funding. I guess that puts you with the rest of the “half truthers” feeding at the Illinois public Ed trough.

Game on, JS.

Comment by Arizona Bob Wednesday, Mar 4, 15 @ 1:03 pm
to “A guy”:

Reserves are meant for one time hits. If this cut is ongoing, cities will be laying off people big time.

When cities/counties bond, rating agencies look at our reserves. Inadequate reserves means we pay out higher interest costs.

Utilities are generally self-funded in separate funds with their own fund balances. They don’t get propped up by the General Funds where the income tax goes.

Police and fire cuts are not hyperbole. Those two departments have the most costly employees in terms of wages, work comp, overtime, and pensions and often make up half of the general fund or more, especially factoring in liability and health insurance.

What’s left is city clerks with statutory duties, code enforcement and zoning departments, finance departments, public works, i.t. and building and grounds. If you think a 5-10% cut to a GF can not effect police and fire in most downstate places, you’re sorely mistaken. Sorely.

Comment by Shemp Wednesday, Mar 4, 15 @ 1:05 pm
And this goes back to the State on the spending side anyway. It would be easier for cities to stomach cuts to revenue if they had much real sway over their operations. Record keeping requirements, evidence storage, I.T. requirements to tie into state police databases, interest arbitration for police and fire, arbitrary prevailing wage rates on infrastructure projects, statutes barring combined police/fire departments, revenue restrictions for non-home rule units, ridiculous IDOT requirements and hoops, wasted grants, useless reporting. There are ways locals could save big, but can’t. The State has also done a nice job with running out many of our small time contractors that can’t keep up with the rules, apprenticeship requirements and such that the big labor guys have gotten through the GA. Fewer contractors, higher bids. Sad when you get 2 bids for a half million in road work because that is all that is left.

Comment by Shemp Wednesday, Mar 4, 15 @ 1:13 pm
==The scary part of your rant is that its likely you’re on some school payroll, and you choose to mislead about the facts and reality of application in school funding. I guess that puts you with the rest of the “half truthers” feeding at the Illinois public Ed trough.==

So anybody that disagrees with you must be on a school payroll and makes them a “half truther?” The only dope I see here Bob is you. You consistently rail against the public education system in Illinois with claims of mass patronage, overpaid teachers and anti-union rhetoric. You hate the Illinois school system. We get it. Next time a “Ditto to all of my previous comments on the Illinois school system” will suffice. We’ll all know what you are talking about and it will save everyone a lot of unnecessary reading.

Comment by Demoralized Wednesday, Mar 4, 15 @ 1:15 pm
Still waiting for the Governor to say two works about that “shared sacrifice” from his rich friends. Certainly are a lot of cuts that involve the poor and middle class. Still not one peep about sacrifice from the rich. Hmmm.

Comment by Demoralized Wednesday, Mar 4, 15 @ 1:17 pm
“two words”

Comment by Demoralized Wednesday, Mar 4, 15 @ 1:17 pm
===

- Apocalypse Now - Wednesday, Mar 4, 15 @ 12:58 pm:

Cutting services is much different than cutting essential services. Many of these communities can cut spending, without cutting essential services. The first thing they can do is cut salaries and have employees pay more for their often very generous health, sick days, and allowances.===

You ever bargained with police and fire unions for reducing days off or increasing health contributions? Rhetorical question as you obviously haven’t. If half the general fund employees are covered by police and fire unions, there is no cutting. It will go to interest arbitration. No interest arbitrator is going to tell a union to pay more for health insurance while taking a wage freeze or cut and also be told to earn fewer sick days and reduce uniform allowances. A city would be lucky to get one of those and the wage freeze is the last thing the City is going to get. An arbitrator will tell you if you can’t afford the going rate, then cut staff. That’s not conjecture, that is first hand.

Comment by Shemp Wednesday, Mar 4, 15 @ 1:20 pm
Very glad the governor opened this can of worms. Around the DH suburbs they would do substantially better than just “survive.” They would continue to prosper and gain some much needed spending discipline of the sorts the State has been applying for six years.

Comment by walker Wednesday, Mar 4, 15 @ 1:31 pm
@ Arizona Bob - Reading is fundamental and it most have escaped you in the heat of the AZ desert.

-EFAB does not set funding level, it only recommends it which every governor has ignored. They have absolutely zero authority. Besides your obviously hateful blathering you do not understand the makeup of the group. I uesd “the Google” here is the link http://www.isbe.net/efab/html/members.htm. Just an FYI- The IEA, the IFT, and superintendents rarely see eye to eye. Try sitting in the room when bargaining is going on!

-I never said he couldn’t reduce the funding. Check that, he cannot. That has to be passed by the ILGA and signed by the governor like every other budget. You may want to bone up on the Illinois legislative process. here in Illinois we do not have Kings, just a few people that think they are. Maybe AZ is different. Boob.

-PTELL? You really do not understand how PTELL actually works. You know a few of the numbers, but you use have truths to explain it incorrectly. they do not get 5% or COLA. It is CPI that is used. If a district reduces the levy rate they can NEVER recapture that rate without a referendum. Given that one cannot depend on state funding that would take far too long to put in place to address the shortfall. Citizens in PTELL communities do benefit. Taxes do not increase at the same rate as the value of their homes. The value of their homes is positively (or negatively) impacted by the school system. Studies support that claim. Ususally, the rate of CPI is so low, that districts do not capture the full value of their tax rate due to the limitation (Bob, that is what the “L” in PTELL stands for) created by PTELL.

I have established that I am a superintendent, even in past exchanges where I had to set your false and usually hateful diatribes against schools straight. I am free for private tutelage on school finance when you are ready to learn. That is what educators do, we teach and some times our students are hateful fools but we are very patient.

My apologies to other for my heavy sarcasm and snark, we are continuing to fight the budget battle locally. In our small communities schools are very important to our residents, we are the last vestige of fairness no matter what your background is and it is getting old to keep cutting cutting cutting. What are we leaving for kids? Those cuts have happened with benefits and salaries across the board and now it has to be programs that matter to kids.

AZ, game over.

Comment by JS Mill Wednesday, Mar 4, 15 @ 1:43 pm
===Shemp - Wednesday, Mar 4, 15 @ 1:05 pm:===

Many of your points are well taken and well spoken. I disagree with the “one time hit” part. Maybe in some towns, but many in DuPage saw 3 years of tough times with sales tax, real estate tax, and other revenues down. They alternately dipped into reserves on occasion.
I don’t mean to imply that the hit wouldn’t be noticeable, it will be if it happens. If you’re town is anything like mine, the entire local share (or over 90% of it) from the Real Estate taxes is going straight to public employee pensions. That means everything else comes out of somewhere else on the revenue side. It’s that backdrop that means “extra” manning with cops, fire, public works, isn’t affordable when those other revenue streams take a hit.

That doesn’t mean the town goes down to Mayberry coverage with cops. It more often means, there are fewer. An FD can go into every day with 30-40% overage on manpower. Say 10 guys fill a shift and each shift has 13 guys….you think that’s terribly uncommon? Take a look around, it isn’t.

You’d have to reduce quite a bit to say there’s less cops on the street or guys at the ready in the firehouse. Towns are struggling with this.

My gripe is, the moment you hear of a cut, the immediate response is “you’ll be less safe”. It’s just not true.

Comment by A guy Wednesday, Mar 4, 15 @ 1:55 pm
I recently read that 40 years ago the ratio of taxes was $100 in from corporate to $33 for individual/family. Today the ratio is corporat $7 to $33 individual/family. There will always be concerns about taxes, but it seems that corporations claim of unfair taxes is not responsible. This is magnified by the amount of money spent on defense to keep multi national businesses safe. Do not listen to the talking points of political hacks…we need revenue.

Comment by Carl LaFong Wednesday, Mar 4, 15 @ 2:18 pm
What happens to the towns that don’t survive?

Comment by Carl Nyberg Wednesday, Mar 4, 15 @ 3:44 pm
Carl:
See Rep Sandack’s local government bankruptcy bill: http://www.ilga.gov/legislation/BillStatus.asp?DocTypeID=HB&DocNum=174&GAID=13&SessionID=88&LegID=83761.

Comment by GA Watcher Wednesday, Mar 4, 15 @ 4:02 pm
==Those mail/walk pieces without Mayor’s support, it gets cold out there…===

That certainly was true before Willy. Maybe still true in some parts. In DuPage, we’ve had so much turnover in Mayors over the past 2 cylces, there are few with much muscle at all. They haven’t been in long enough to consolidate that kind of influence.

Walking these days, you’d be stunned at how many folks don’t even know who their own mayor is in a town. The newer models aren’t hanging in there for 4 or 5 terms anymore. Truthfully, the job isn’t that fun and the old regimes are pretty much gone.

Comment by A guy Wednesday, Mar 4, 15 @ 4:46 pm
Higher taxing bodies indirectly, but essentially, raiding the reserves of other, lower taxing bodies.

Kind of puts consolidating taxing bodies in a different light. Heck yes let’s consolidate all those debt free taxing bodies with no pension problems and cash reserves because…ummm…look! Squirrel smaller government!

Comment by Toure's Latte Wednesday, Mar 4, 15 @ 5:42 pm
Municipalities, even Island Lake, have a great deal of discretionary spending. It’s well past time Illinois as a whole as well as it’s multiple levels of redundant government take a long hard look at their budgets and go line by line. Time to move past excuses like “well, we’ve always gotten it, so we depend on it now”. 20 years of mismanagement is going to be a painful fix folks…

Comment by Javorica Wednesday, Mar 4, 15 @ 8:04 pm