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IML survey: Local governments seeing 20-30 percent hit to revenues

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Illinois

A whopping 87 percent of communities replying to an Illinois Municipal League survey say they have suffered revenue losses so far, with the median decline 20 percent to 30 percent.

That’s a big, big number when most budgets generally don’t change more than a few percentage points year to year. And there are indications the figure will rise because some revenues lag and the full impact is not yet known, says league Executive Director Brad Cole.

According to the survey—227 municipalities around the state replied—reduced sales tax income is the most common source of problems, with 21.2 percent of municipalities reporting it as a “significant” cause of revenue woes in the period since March 1. Lagging gaming tax and motor-fuel tax revenues followed, at about 17 percent each, with receipts from income taxes collected by the state and passed on to local communities at 14.7 percent.

Cole said his group projects that when the money actually is passed on, his members will see an average drop of 10 percent in income tax receipts.

Survey results are here. 46.5 percent say they plan to reduce municipal personnel and/or services.

And the US Senate and House are still on vacation.

Heckuva job.

posted by Rich Miller
Wednesday, Aug 26, 20 @ 10:20 am

Comments

Probably not the time for a pay raise either

Comment by Lucky Pierre Wednesday, Aug 26, 20 @ 10:30 am
lack of Federal Leadership is now the new Normal. A far cry from real leadership we had a few years ago with actions to HELP america, not destroy it

Comment by truthteller Wednesday, Aug 26, 20 @ 10:33 am
The end result of this will be that police fire will be reduced in communities. I most budgets public safety is 70% of the budget and it is impossible to avoid cuts in this area when cuts need to be made.

Comment by James the Intolerant Wednesday, Aug 26, 20 @ 10:34 am
Many difficult and painful decisions will be forthcoming. The scope of those will depend on the size of any federal bailout that ultimately gets approved. And the elected leaders play chicken with each other. Both sides trying to inflict maximum damage on the other. Ridiculous.

Comment by SSL Wednesday, Aug 26, 20 @ 10:44 am
Amazon now collects sales tax, who gets that? the state or the community to which the purchase was delivered? I would guess (other than motor tax) a lot of sales tax revenue is down because people just switched to online buying (other part down because folks simply made do or deferred purchases)

Comment by cermak_rd Wednesday, Aug 26, 20 @ 10:49 am
I suspect the idea of kicking police and firefighters pension requirements down the road to be part of the answer.
In the past local control of funding, within limits, enabled unions and management to work out a plan that made sense. With the Team Pritzker plan to have Springfield appoint the actuary those days will be gone.

Comment by Back to the Future Wednesday, Aug 26, 20 @ 10:57 am
The very same people who decry efforts to “de-fund the police” are going to let that happen by default, because they refuse to provide federal relief to local governments to replace lost revenues. I guess they can claim it’s not their fault, since the locals are the ones stuck having to make the painful cuts. What a profile in courage…

Comment by cover Wednesday, Aug 26, 20 @ 10:59 am
Sorry, but in Rock Island, the Tru Value *still* isn’t enforcing masks, and I won’t go into stores that don’t enforce. So I went to the Moline Menards (which began enforcing masks May 1). But the inconsistency of enforce has driven me to online buying. So much safer and far, far less stressful.

Comment by RIJ Wednesday, Aug 26, 20 @ 11:00 am
Peoria had what is reported to have been an acrimonious City Council meeting Tuesday, at which the budget proposal to cut 2 more fire engines (and staff) ultimately was defeated. One engine was on the Southside where housing stock is older and some still burn gas ovens for heat; the other was on the far North side where the stock is newer but lighter and therefore, burns faster.

No agreement was reached after 6 months of wrangling.

https://www.peoriapublicradio.org/post/peoria-council-makes-no-decisions-fire-department-cuts#stream/0

Comment by dbk Wednesday, Aug 26, 20 @ 11:08 am
I assume these losses are only in poorly run Democrat local governments and…wait, that’s not how the world works?

Comment by High Socks Wednesday, Aug 26, 20 @ 11:21 am
When it gets too cold for bars and restaurants to seat people outside, revenue is going to dive some more. A lot of those businesses are barely hanging on.

Comment by SAP Wednesday, Aug 26, 20 @ 11:21 am
And yet it seems to be the year for new TIFs all around.

Comment by walker Wednesday, Aug 26, 20 @ 11:26 am
“I assume these losses are only in poorly run Democrat local governments and…wait, that’s not how the world works?”

And the people who want to refuse giving Illinois a federal bailout are responsible for adding $6 trillion to the national debt under Trump, more per capita than Obama, and exploded the federal deficit to a pre-pandemic $1 trillion dollars. It’s only because red states are hurting financially that Washington could ultimately bail us out.

Comment by Grandson of Man Wednesday, Aug 26, 20 @ 11:34 am
The hits keep on coming. That will leave a mark. Too bad we don’t have a federal government willing to help solve the problems that beset state and local governments.

Comment by Huh? Wednesday, Aug 26, 20 @ 11:43 am
not understanding why furloughs have not been happening all the way along. they did that in Europe and they did not have to lay off people.

Comment by Amalia Wednesday, Aug 26, 20 @ 11:51 am
To the post,

The reality to states and ballots and municipalities and bailouts, we’re at a crossroads of “are you going to make this political, or are you going to work towards functional solutions in a bipartisan way”

Revenue to towns? Yeah, that ain’t partisan. Not red, not blue, but green, and that green is not there.

Those who look and pine for “limited government, lower taxes”, yeah, that’s great, I’m not dinging ya… but this is drying up revenues in a fiscal crisis that is exasperated by a “pesky” pandemic that folks are deciding is a way to divide the politics too.

As it’s true, you can’t have an economy with a global pandemic, you may not believe this, but without an economy, governments can’t collect revenues when an economy is in crisis too… and revenues in sales and business are non-existent.

At some point, crisis of health and economy need to viewed with realities of help not punishment for its own sake and that same punishment hurting factions of ALL types.

It’s not going to get better in the short term. That much is real too

Comment by Oswego Willy Wednesday, Aug 26, 20 @ 12:18 pm
For too long people have yelled about taxes being too high, but they still demanded more and better service from government. We are now facing the reality that government will not have sufficient income to provide the needed services and in reality may have to reduce the service. Unfortunately this is happening at a time these very services are desperately needed. I wonder if some people will wake up to realize that the reason we fund public service is for days such as these.

Comment by illinifan Wednesday, Aug 26, 20 @ 12:27 pm
=Probably not the time for a pay raise either=

Please, you have my encouragement to decline a raise if you are offered one.

=The very same people who decry efforts to “de-fund the police” are going to let that happen by default, because they refuse to provide federal relief to local governments to replace lost revenues.=

Very well put.

Comment by JS Mill Wednesday, Aug 26, 20 @ 12:32 pm
===Amazon now collects sales tax, who gets that?===

The State has bee getting it since January and it is part of the distributions to counties and munis. Our first disbursement was received in March. I read IML’s e-mail and believe they have factored it into the equation still leading to the 20% reduction.

Comment by Proud Sucker Wednesday, Aug 26, 20 @ 1:04 pm
Thank the state and local revenue gods that the Supreme Court reversed itself about sales taxes on online commerce in the 2018 Wayfair decision.

Comment by ChicagoBars Wednesday, Aug 26, 20 @ 1:09 pm
OK so it’s part of distributions to counties and munis, but is the county or muni where the IL resident lives who actually bought or received the merchandise being awarded the sum or is it tossed into a kitty that then uses the generalized formula to send $ along to counties and munis? I would hope the former since that would actually compensate the community that actually lost out from local purchase.

Comment by cermak_rd Wednesday, Aug 26, 20 @ 2:43 pm
Are the IL munis still giving away the sales tax rebates, TIFs, property-tax abatements, and other incentives to corporations in their municipal limits? Shouldn’t these be cut first or paused?

Comment by Ares Wednesday, Aug 26, 20 @ 3:58 pm
With apologies, surely I’m not the only one, even here, who always thinks International Mr Leather when we see the acronym IML. Oak Park River Forest High School used to always have its prom at the Chicago Hilton the same weekend as IML. It made for some interesting elevator rides.

Comment by AnnieH Wednesday, Aug 26, 20 @ 4:38 pm
== is it tossed into a kitty that then uses the generalized formula to send $ along to counties and munis ==

It’s a “revenue-share” fund — 20% of the 6.25% Use Tax is distributed to local governments.

Comment by harp5339 Wednesday, Aug 26, 20 @ 4:53 pm
=== for your failed Covid policy===

Oh. Keep that in mind when you vote for president, because having no policy as president and 180,000 deaths isn’t a success.

Comment by Oswego Willy Wednesday, Aug 26, 20 @ 8:24 pm