In an emailed letter to county constituents, McHenry County Board Chairman Ken Koehler asks residents to contact legislators to oppose cutting local governments’ share of the state income tax. His message follows:
Dear McHenry County Resident,
As a result of the recession and declining revenues, most local governments throughout the State of Illinois have been challenged to make difficult choices in order to balance their budgets while providing vital services to residents.
The current path our State is taking will only serve to make this task more difficult. In all, Illinois has a spending problem, not a revenue problem.
Illinois is unique in that it seems unwilling to take the necessary steps to reduce spending that other states have already done and seems only to focus on more revenue (or other ways to increase taxes).
With the largest income tax increase in State history in January of 2011, the State of Illinois decided to keep all the proceeds for itself thereby eliminating the portion that would normally go back into local governments through the Local Government Distributive Formula or LGDF.
Prior to January of 2011, local governments received 10% of the total income tax, or the LGDF, from the State that has its roots in the 1970 Illinois Constitution.
Currently, local governments are only receiving 6%.
If that is not bad enough, the State of Illinois has indicated they plan to reduce or eliminate the original tax sharing arrangement all together.
One proposal calls for a 30% reduction in the LGDF, or $7,132,356 from McHenry County local governments.
The signals are loud and clear from members of the House and Senate who are using terms like “shared pain” when describing the State’s financial situation. However, McHenry County did not create the State’s budget woes and simply cannot afford this
The McHenry County Board, along with many other Illinois county boards, the McHenry County Council of Governments, the Metropolitan’s Mayor Caucus, and the Illinois Municipal League, are in strong opposition to any further reduction in LGDF or other revenues, especially at a time when we are already experiencing the same economic hardships the State is facing.
We need your help to get the message to our state legislators by calling, writing, faxing, or emailing them to protect the LGDF…This is your money.
The State of Illinois claims it does not have a Plan B, but we believe Illinois has the opportunity to position itself to compete with neighboring states for businesses.
Becoming competitive on taxes and workmans’ compensation are two key ways to make Illinois more attractive for businesses. This is the type of much needed reform that will allow Illinois to put our good citizens back to work. Jobs will increase revenue and Illinois will only rebound when we once again become financially viable and responsible.
County Board Chairman=
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I fully understand why local governments were cut in on the take when Governor Richard Ogilvie pushed the 2 1/2% income tax through the General Assembly in 1969. He needed Richard Daley’s help to get it passed and that was the price.
In two increases since then by Governors Jim Thompson and Jim Edgar, although not in the legislature at the time, I saw no reason to share the tax revenue with local governments. State government wanted the money and enough state representatives and senators were willing to take the heat to pass the tax hikes.
No local government official took any political hits, but they got to spend 10% of the money.
The same thing happened with the passage of the RTA sales tax hike. To buy off DuPage County Republican State Senators, the amount “needed” by the Regional Transportation Authority was increased from 1/4 of a percent to 1/2 of one percent. The second half could be spent by collar county boards for roads or, to accommodate the DuPage County folks, law enforcement purposes.
So collar county boards got “free money” then, just as they did when income taxes were imposed or increased…until this past year when they were hiked 67%.