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Question of the day

Posted in:

* Finke

More state income tax money and consolidation of downstate police and firefighter pensions top the agenda this year for the state’s mayors.

The Illinois Municipal League said Monday it also is making a priority approval of a capital plan that would provide more money for transportation, water, sewer and other improvements in cities. […]

The mayors also want the state to provide more state income tax money to cities and towns. Local governments were getting 10 percent of state income tax collections. However, local governments did not get a share of the income tax increase, meaning local governments now only receive about 5.75 percent of individual income tax collections and about 6.5 percent of corporate collections.

The IML said the General Assembly continues to impose mandates on local governments whose costs could be offset if the state returned to giving cities 10 percent of income tax collections. That, in turn, would take pressure off local property taxes to cover those costs.

* Illinois News Network

Illinois currently sends just over 6 percent of personal and corporate income taxes to local municipalities, totaling around $1.3 billion in personal and corporate income tax annually.

IML-backed legislation would gradually increase that figure to 10 percent by 2023. […]

Increasing the amount of money directed to municipalities means less money for the state to spend. The state’s financial picture is bleak. Lawmakers face a $3.2 billion deficit in the next budget and more than $8 billion in backlogged bills. The state’s pension systems have more than $134 billion in unfunded liabilities. Pritzker’s proposed budget counts on revenue from recreational marijuana and sports gambling, among other taxes and fees, to plug the gap. Lawmakers have yet to legalize recreational marijuana or sports gambling.

* The Question: Should municipalities be returned to receiving 10 percent of all state income tax collections over four years? Take the poll and then explain your answer in comments, please…


surveys

posted by Rich Miller
Tuesday, Mar 5, 19 @ 1:21 pm

Comments

  1. I said yes but I actually think it should tied to some kind of local reduction in property taxes. At least a portion of it.

    Comment by Been There Tuesday, Mar 5, 19 @ 1:28 pm

  2. Only if it is prorated by area.

    We just heard how different parts of the state have different labor costs. I see no reason why rural areas should have parity with urban areas in what the state sends them.

    snark, but only a little.

    Choose your ideals carefully, lest they be applied to you.

    Comment by TheInvisibleMan Tuesday, Mar 5, 19 @ 1:39 pm

  3. Times change; consolidate pensions before giving money to municipalities

    Comment by the Edge Tuesday, Mar 5, 19 @ 1:43 pm

  4. Voted NO. Not only should it not be raised to 10%, it should be reduced or eliminated until we figure out our mess. LGDF is about the only discretionary revenue that the state can cut. An across the board cut,although unpopular, shares the pain of our gross mismanagement of the states financials.

    Comment by Blue Dog Dem Tuesday, Mar 5, 19 @ 1:45 pm

  5. Yes. Still remember then-GOMB Director Vaught justifying the reductions saying local governments would have “skin in the game” i.e. making local governments pay for state mismanagement.

    Comment by Anyone Remember Tuesday, Mar 5, 19 @ 1:48 pm

  6. I voted no. The amount they receive didn’t go down and I don’t find a historical percentage argument convincing. Their needs should be taken into account in the state budgeting process along with higher education, human services, debt and all the rest.

    If the math says consolidating pension plans is more cost-effective, then by all means. If they come out to support revenue to fund a capital plan, then by all means.

    Comment by Earnest Tuesday, Mar 5, 19 @ 1:48 pm

  7. Emphatic “No.”

    Democrats are for the most part clustered in a relative handful of urban areas.

    That means most mayors, even if they technically hold nonpartisan jobs, are Republicans.

    The Municipal League has thus far failed to support an increase in the income tax. In fact, they largely sided with Rauner publicly over the last four years.

    If the IML wants a piece of the pie, that can’t be against the pie. And they moreover need to twist some arms to get some Republicans on the bill.

    You eat what you kill in politics.

    Comment by Thomas Paine Tuesday, Mar 5, 19 @ 1:48 pm

  8. Earnest - the amount did go down. They shaved off points during the big recession, and they never passed off any of the increases to the municipalities.

    I voted yes because municipalities are much more efficient in delivery of services, purchasing, and in general being better stewards of taxpayer money (Chicago EXcluded). In fact, send 150 small town mayors to the GA and they will fix everything in 4 years or less.

    Comment by allknowingmasterofraccoodom Tuesday, Mar 5, 19 @ 1:51 pm

  9. Voted yes. Originally this was part of the bargain to get an income tax and to avoid county income taxes as in Indiana.

    Generally don’t like one group raising money and another group spending it. In this case I don’t think this mismatch will affect behavior. At the margin, local costs will still be funded locally.

    Comment by Last Bull Moose Tuesday, Mar 5, 19 @ 1:53 pm

  10. I voted no. I would prefer the State allow municipalities to impose a local income tax. Let the city council vote on it if they want it.

    Comment by My Button is Broke... Tuesday, Mar 5, 19 @ 1:54 pm

  11. No. Why should any politician get to spend tax dollars without taking the heat for levying it?

    Comment by Anonymous Tuesday, Mar 5, 19 @ 2:01 pm

  12. Progressive tax or not there is not going to be anywhere near enough new revenue to pay for the laundry list of things people want on top of the ever escalating pension costs that are a huge drain on the general fund.

    It feels like the bizzaro world sometimes with all the new spending people are talking about as if the progressive tax is going to raise another 10 billion strictly on the back of millionaires.

    Comment by Anon Tuesday, Mar 5, 19 @ 2:01 pm

  13. The City of Champaign hasn’t raised the effective property tax rate in, like, a quarter of a century and, like Wisconsin, et al, during my rein of terror it imposed discretionary taxes and fees to fund city services. Budget is balanced and (at least when I was in office) city paying AHEAD on some of the pension obligations…that being said, unlike the disparate “giver/taker states” situation, as a taxpayer I want our fair share of what the state promised as opposed to bailing out communities who insist taxes are not the price of democracy and then have a hand out…

    Comment by Don Gerard Tuesday, Mar 5, 19 @ 2:09 pm

  14. “No. Why should any politician get to spend tax dollars without taking the heat for levying it?”

    Happens all the time. Local agencies receive money that isn’t levied as taxes such as MFT, local sales tax, zoning fees charged to developers, building permit fees, water and sewer bills, various reimbursements.

    Comment by Huh? Tuesday, Mar 5, 19 @ 2:12 pm

  15. Yes. IF they support the progressive tax amendment and other tax increases. No new revenue = no more money for munis.

    Comment by Pot calling kettle Tuesday, Mar 5, 19 @ 2:22 pm

  16. No, unless local governments lower sales and property taxes by an equivalent amount. I suspect that people are moving out of state because local governments tend to raise sales and property taxes on a regular basis.

    Comment by A Jack Tuesday, Mar 5, 19 @ 2:29 pm

  17. Voted yes because Illinois keeps pushing out mandates that will require more and more revenue.

    Comment by Chicagonk Tuesday, Mar 5, 19 @ 2:44 pm

  18. No way. Now if all teacher’s benefit costs became an obligation of the municipals, maybe I’d change my mind.

    Comment by Anonymous Tuesday, Mar 5, 19 @ 2:44 pm

  19. Yes. They shouldn’t have taken any of it in the first place. This is part of the grand bargain Ogilivie struck with them at the beginning to keep them from opposing the state income tax when it was implemented.

    It’s a sin the state ever took it away. It was always budgeted in municipal budgets for outlined services. Taking it in the first place was a raid.

    Comment by A guy Tuesday, Mar 5, 19 @ 2:56 pm

  20. I voted no.
    The state is broke. It needs every dime it can get.
    On consolidating Public Safety workers pension systems, I think it is their money and we should respect whatever they want to do.

    Comment by Back to the Future Tuesday, Mar 5, 19 @ 3:01 pm

  21. 20 comments and 234 Yes votes? How many mayors do we have in the room here? LOL

    Mayors: Richard Ogilvie died 30 years ago. I dunno what grand bargain you might have struck with him in the 60’s, but here is the reality today: there is not enough money to fund state services.

    If Republican mayors want to raise the income tax an additional 10 percent, you need to put Republican votes on the bill.

    Otherwise, the money collected from a progressive income tax is going to go into education funding which will primarily benefit urban school districts.

    Your next-best bet is to support a revenue neutral sales tax expansion that will grown revenue over time by taxing services, a share of which you will get…if you support the revenue and put GOP votes on the bill.

    Comment by Thomas Paine Tuesday, Mar 5, 19 @ 3:17 pm

  22. The state of Illinois has imposed pension obligations on local governments that prevent these governments from providing other services. A restoration to 10% would help fund these unfunded mandates and allow our local governments to provide things like road repairs.

    Comment by Kent Tuesday, Mar 5, 19 @ 3:19 pm

  23. ===Thomas Paine - Tuesday, Mar 5, 19 @ 1:48 pm:===

    I voted yes, but Thomas Paine changed my mind. I was going to suggest that it should be tied to a progressive income tax.

    Comment by Anon Tuesday, Mar 5, 19 @ 3:27 pm

  24. ===- Anonymous - Tuesday, Mar 5, 19 @ 2:01 pm:

    No. Why should any politician get to spend tax dollars without taking the heat for levying it?===

    Funny, the State creates the fire and police pension rules from retirement age to benefits and tells locals to figure out how to pay for it. Seems fair to work it the other sometimes. They set the benefits, then the locals take the heat for increasing levying for the pensions….

    Comment by Shemp Tuesday, Mar 5, 19 @ 3:45 pm

  25. ===

    - Blue Dog Dem - Tuesday, Mar 5, 19 @ 1:45 pm:

    Voted NO. Not only should it not be raised to 10%, it should be reduced or eliminated until we figure out our mess.===

    Cool, so that’s about 15% of our General Fund operating budget. That’s a 15% cut to the fire/police/building/clerk and finance departments, of which nearly 80% is personnel costs and the fire and police personnel costs are more or less dictated by the State’s collective bargaining rules meaning we don’t really have much control over them either at the local level.

    Locals are capped in taxes, yet have to meet certain requirements (like the State recently mandating fire department staffing be a mandatory bargaining topic meaning it’s near impossible to reduce staffing without buying the union off with other perks). It’s real easy to tell locals to cut while ignoring the hand tying and increased burdens for transparency, infrastructure and personnel costs being forced on them.

    Comment by Shemp Tuesday, Mar 5, 19 @ 3:52 pm

  26. Yes More and more regulations are being forced on municipalities from all levels, federal, state etc. Requirements such as EPA water quality, wastewater management, prevailing wages, the list goes on and on. Then the state restricts the revenue sources through legislation such as PTELL and reduction of the LGDF distributions. Municipalities are being squeezed from both ends. Municipalities over the last decade have tightened their belts to be fiscally responsible. So the State shouldn’t expect local government to fund their irresponsible financial mess. The state needs to cut its own expenses. Delaying payment isn’t balancing your budget.

    Comment by Me Tuesday, Mar 5, 19 @ 3:53 pm

  27. Shemp. Cool. I get it. Lets say you and your city lead the charge for higher taxes. Might as well start with the flat tax for 3 years til you get that progressive tax that only hits millionaires. Why dont you go ahead and put it on an advisory referendum to show how its done.

    Comment by Blue Dog Dem Tuesday, Mar 5, 19 @ 4:17 pm

  28. ==Mayors: Richard Ogilvie died 30 years ago. I dunno what grand bargain you might have struck with him in the 60’s, but here is the reality today: there is not enough money to fund state services.==

    Hey Tom Paine, you willing to make the same argument about the pension funds? Those deals were struck in the wayback machine too. Jackie Vaughan has also passed away since then. Does the spirit of the deal die with the spirit of the people who made the deal?

    Comment by A guy Tuesday, Mar 5, 19 @ 4:36 pm

  29. Voted Yes. Keep in mind that the poor decisions made that got us into this mess weren’t made at the municipal level. Returning 10% to the communities that send it isn’t alot to ask.

    Comment by southside Sam Tuesday, Mar 5, 19 @ 5:57 pm

  30. Yes. Municipals do a great deal to try and help bring in business yet they suffer empty store fronts because state actions have forced them to raise property taxes to cover the mandates. Local governments have taken a pounding from unfunded mandates.

    Comment by theCardinal Wednesday, Mar 6, 19 @ 6:00 am

  31. I vote Yes. In order to prevent each municipality to levy their own sales and fuel taxes, the State of Illinois made the commitment to municipalities to levy and collect all these taxes and forward 10% on per capita system back to them. Because of state dismal financial responsibility, our representatives squandered funds just like pension contributions. It is simple matter to keep their word and adhere to contract they signed

    Comment by krzysztof wasowicz Wednesday, Mar 6, 19 @ 11:28 am

  32. i vote yes

    Comment by Tom thumb Wednesday, Mar 6, 19 @ 9:50 pm

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