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* Daily Herald…
When Illinois legislators created a state income tax in 1969, they agreed to share a twelfth of it — about 8.3% — through the Local Government Distributive Fund (LGDF) rather than allow smaller units of government to enact their own income taxes.
I’ve heard about this agreement so many times, but I’ve wondered who made the agreement and how.
* So, I asked the Illinois Municipal League. I was pointed to their LGDF fact sheet…
Governor Richard Ogilvie enacted the state income tax in 1969. At that time, Governor Ogilvie needed the help of Chicago Mayor Richard J. Daley to achieve passage of the income tax through the Illinois General Assembly. The agreement between Mayor Daley and Governor Ogilvie ensured that enough legislators would support the income tax to win passage.
Thoughts?
posted by Rich Miller
Wednesday, May 22, 24 @ 1:07 pm
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There must be a three-member district story in the House vote somewhere.
Comment by Dan Johnson Wednesday, May 22, 24 @ 1:15 pm
=At that time, Governor Ogilvie needed the help of Chicago Mayor Richard J. Daley to achieve passage of the income tax=
There’s a bargain made.
Comment by Donnie Elgin Wednesday, May 22, 24 @ 1:24 pm
Isn’t there an old saying by politicians that goes something like this:
Next time, get it in writing in a statue book. There seems to be an “agreement”of limitations on a decades old deal between deceased politicians.
Comment by Norseman Wednesday, May 22, 24 @ 1:25 pm
Regardless of how it came about, we built hundreds of municipalities budgets with LGDF as part of the foundation and now are letting that foundation erode.
Comment by It's Just a Pill Wednesday, May 22, 24 @ 1:25 pm
I had always heard the story that part of agreement was that Daley would not use the passage of income taxes against the Governor on next election but somehow that was forgotten. Don’t know if true but i like the story
Comment by DuPage Saint Wednesday, May 22, 24 @ 1:52 pm
8.3% > 6.47%
Comment by Dance Band on the Titanic Wednesday, May 22, 24 @ 2:01 pm
DuPage - I suspect that speculation is wrong. Why?
Because Daley hater Dan Walker was the Dems’ nominee in 1972, defeating paul simon in the primary.
walker used the tax issue against Ogilvie and won a squeaker race. but I doubt he did so at the behest of daley
Comment by jim Wednesday, May 22, 24 @ 2:13 pm
=Local Government Distributive Fund=
Forget not that JB has plans to eliminate the 1% grocery tax - so if a municipality has an Aldi, Meijer, Jewel, Schnucks, Hy-Vee, or Woodman’s that also will be a hit.
Comment by Donnie Elgin Wednesday, May 22, 24 @ 2:15 pm
===8.3% > 6.47%===
8.3% of a 2.5% income tax rate in 1969 is 0.21% of taxable income going to LGDF.
6.47% of a 4.95% income tax rate is 0.32% of taxable income going to LGDF.
So, no, the original share is not greater than the current share. In fact, the current share is 52% more than the original share where it counts: dollars going to LGDF.
Comment by thechampaignlife Wednesday, May 22, 24 @ 2:20 pm
I wonder if a young Mike Madigan, a pro-Daley delegate to the constitutional convention, was whispering in Daley’s ear about this deal.
Comment by 47th Ward Wednesday, May 22, 24 @ 2:20 pm
Yes, and the total income tax rate at the time was 2.5%. You could say the deal they struck was for a local income tax rate of 0.2075% (8.3% of 2.5). Today the total income tax rate is 4.95%. To keep the local rate at the same 0.2075%, the LGDF share of the higher total rate would be 4.19%. I’m not saying that’s the correct result, just that numbers are fun.
Comment by notsosure Wednesday, May 22, 24 @ 2:22 pm
After looking at thechampaignlife and notsosure numbers I would like to thank the Mayors for pointing out that they are getting more than they bargained for. That does not even include the rate on corporations.
Comment by Bigtwich Wednesday, May 22, 24 @ 3:03 pm
Bigtwitch, the mayors also didnt include the millions and millions of additional dollars locals get through local distribution of revenues that didnt exist in 1969. Marijuana for instance. LGDF is about a lot more than the income tax now.
Comment by Michelle Flaherty Wednesday, May 22, 24 @ 3:13 pm
“pointed to their LGDF fact sheet” - facepalm
Comment by Robert Montgomery Wednesday, May 22, 24 @ 3:22 pm
So it never was the 10% the mayors claim it was.
Comment by Interested Bystander Wednesday, May 22, 24 @ 3:44 pm
I would love to know how many things we do in state government today that can all be traced back to deals between Daley and Ogilvie.
Comment by 4 eyes Wednesday, May 22, 24 @ 4:44 pm