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The carrot and the stick

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* Let’s revisit yesterday’s Daily Herald story about how some municipal groups were contemplating whether to back an extension of the state income tax in order to possibly get a bigger piece of the revenue sharing pie or to ward off an attack by Democrats.

The story was based on a letter that DuPage Mayors and Managers Executive Director Mark Baloga wrote to his members

You likely have seen recent news reports of Governor Quinn and Legislative Leaders discussing the opportunity for local governments to secure, or even increase, the local share of state income tax (aka “LGDF”) if the current 5% income tax rate is extended beyond its current sunset date of 2015. Senate President Cullerton directly addressed this topic with DMMC members on April 9 during our Springfield Drive Down. Since that meeting, our lobbyist has been in discussions with legislators and has conveyed the following:

After extensive discussion, the DMMC Legislative Committee (by unanimous consent, on April 25) and the DMMC Board of Directors (by a 9-4 vote, on May 1) approved DMMC’s conditional support for continuation of the 5% tax rate as long as the bill adequately increases the current 6% LGDF portion of income tax and provides for direct deposit of LGDF revenue to eliminate delays in payments to municipalities. The Board’s motion further specified using this opportunity to pursue additional legislative action including:

That’s all really quite fascinating. A grand bargain laid open.

* OK, now back to yesterday’s Daily Herald story

Cullerton spokeswoman Rikeesha Phelon said she couldn’t confirm the conversations between her boss and municipal leaders.

However, Phelon said Cullerton has said for months that mayors would see a smaller share of state income taxes if the rates don’t get extended.

“That’s not a threat,” she said. “That’s just math.”

In order to cut the municipal share, new legislation would have to be passed.

“This certainly sounds to me like out-and-out extortion,” said Madeleine Doubek, chief operating officer of Chicago-based Reboot Illinois, a voter-advocacy digital media group. “This just pulls back the curtain on the worst of Illinois government in action. Who, in this equation, is looking out for the taxpayers?”

* As I also told you yesterday in an update, Sen. Donne Trotter unveiled legislation yesterday designed to put heat on the mayors…

After facing years of funding cuts, Illinois’ schools could get more than $1 billion in new funding as State Senator Donne Trotter (D-Chicago) is urging his colleagues to truly make education the priority they claim it is.

Currently, mayors and village presidents get a cut of the state’s income tax with no strings attached. Trotter’s proposal ends that giveaway and instead steers the dollars – $1.45 billion in the upcoming budget year – to the state’s public schools in an effort to have the state finally live up to its education funding commitments.

* The bill had a hearing today. Trotter eventually pulled the proposal out of the record, but the SDems tweeted extensively during the debate

Discuss.

posted by Rich Miller
Thursday, May 8, 14 @ 11:27 am

Comments

  1. == After facing years of funding cuts, Illinois’ schools could get more than $1 billion in new funding ==

    Thought the “education surcharge” was supposed to address this. Ask for 1%, get 2%, and our schools still get neglected by legislators.

    I have little trust any more that those who talk about the importance of education in Illinois really means it. Good for Trotter on this, regardless of whether it is meant as a “stick” or an ambitious plan on its own.

    Comment by Formerly Known As... Thursday, May 8, 14 @ 11:37 am

  2. Cities need to be careful before jumping on the more tax bandwagon because many of them, such as Aurora, already have massive taxes from within (property, sales, etc). When you add more income tax to the overall tax burden on the taxpayer, it becomes too expensive to live or do business.

    Comment by Captain America Thursday, May 8, 14 @ 12:47 pm

  3. ==However, Phelon said Cullerton has said for months that mayors would see a smaller share of state income taxes if the rates don’t get extended.

    “That’s not a threat,” she said. “That’s just math.”==

    The bill that created the higher tax rates reduced the percentage of income tax revenues that go to the local government distributive fund so that (roughly) all of the tax increase would go to the State. As the tax rates phase down, the percentage of revenues that goes to the locals goes back up. So the locals will get a bigger percentage share of income tax revenues when the rates go back down in 2015, and should get roughly the same dollar amounts.

    Comment by Anon. Thursday, May 8, 14 @ 2:07 pm

  4. –“This certainly sounds to me like out-and-out extortion,” said Madeleine Doubek, chief operating officer of Chicago-based Reboot Illinois, a voter-advocacy digital media group.–

    Gee, Maddy, why don’t you ask the Grifs to buy you a dictionary? Then you could look up the definition of the word and see how ignorant you are.

    Comment by wordslinger Thursday, May 8, 14 @ 6:09 pm

  5. The Mayors and Village Presidents, deep down, want and need this money–and they’re GONNA take the bait with the Income Tax permanent extension as a result…!

    Comment by Just The Way It Is One Thursday, May 8, 14 @ 7:16 pm

  6. Folks, it ain’t just the income tax.

    Local share of the sales tax will eventually shrink too.

    Call it math or call it political reality, but given a choice between cutting funding for schools or state programs that the General Assembly is accountable for, or sending a check to someone else to spend where lawmakers neither have a say nor get credit….

    Comment by Yellow Dog Democrat Thursday, May 8, 14 @ 7:27 pm

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