The McHenry County Council of Governments (McCOG) has calculated how much money each village and city in the county would lose in state subsides should Governor Bruce Rauner’s budget recommendations be enacted.
The Govenror suggests cutting the subsidy in half.
The total loss for the municipalities all or partially in McHenry County would be $13.8 million.
In addition, County government would lose about $3.1 million.
Income tax is distributed according to the number of people counted during the last census. From the information below, it appears the estimated income tax distribution for this year is $97 per person, with a projected increase of $2 next year.
The Metropolitan Mayors Conference has put out the following press release:
MAYORS CAUCUS STATEMENT ON GOVERNOR RAUNER’S PROPOSED REDUCTION OF LOCAL GOVERNMENT FUNDS
The Metropolitan Mayors Caucus is extremely disappointed in Governor Rauner’s call to reduce the local share of the State income tax by 50 percent which he announced in his Budget Address to the Illinois General Assembly today in Springfield.
The Caucus’ member mayors from 273 municipalities in the Chicago metropolitan area are very concerned about how this $600 million cut will affect their abilities to provide essential services to their residents.
They are surprised that the Governor proposes to transfer The State’s budget problem to local government.
The local share has been an important revenue stream for municipalities since the income tax was first instituted in Illinois in 1969.
Local communities have counted on it for 45 years to help fund key public services like police, fire, water and sewer treatment, infrastructure repair and construction and snow removal.
A 50 percent sweep of these funds will reduce the revenues for these needed local services by nearly $50 per resident.
The City of Chicago would, see its local share cut by about $135 million each year under the Governor’s proposal.
A town like south suburban Sauk Village with a population of 10,000 would see an annual cut of approximately $500,000.
A community of 25,000 like Batavia in Kane County would experience a cut of about $1.25 million annually.
Orland Park in southwest Cook County with a population of 60,000 would see its annual local share cut by approximately $3,000,000.
The City of Aurora with a population of 200,000 would see its annual local share reduced by about $10,000,000.
Cuts of these proportions will undoubtedly have significant negative impacts on local services.
Local governments across Illinois are still feeling the effects of the 2008 recession.
They have acted in a fiscally responsible manner during the economic downturn and have been reducing personnel, cutting services and controlling spending to balance their budgets over the last several years.
The Governor’s proposed 50 percent reduction will lead to more layoffs; additional delays and cancellations of more infrastructure projects; and increase local taxes and user fees.
“I’m not sure Governor Rauner understands the affect this proposal will have on local governments,” said Daniel J. McLaughlin, Mayor of the Village of Orland Park and Chairman of the Metropolitan Mayors
“Our annual budgets have already been adopted. Communities are counting on their share of the income tax to pay for local services. Reducing revenues will force communities to have to make further decisions to lay off police officers and firefighters, end repairs to critical infrastructure and cut other key services. These are real decisions that will impact the everyday lives of our citizens. They’re not just moving commas in a ledger like they may be doing in Springfield.”
During the campaign, Governor Rauner spoke about working in partnership with local governments to better serve the residents of our State. The Mayors of the Chicago region are highly disappointed that as one of his first acts, the Governor has chosen to shift the State’s budgetary problems onto local governments. This is not acting in partnership.
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The Metropolitan Mayors Caucus is a membership organization of mayors from Northeastern Illinois’ 273 cities, towns, and villages. The Caucus pushes past geographical boundaries and local interests to work on public policy issues, providing a forum for metropolitan Chicago’s chief elected officials to collaborate on common problems and work toward a common goal of improving the quality of life for the millions of people who call the region home.
Here is the Illinois Municipal League press release:
Governor Rauner Calls for Significant Cuts in Budget Address
Governor Bruce Rauner delivered his first and highly-anticipated budget address earlier today. In the days leading-up to the speech it became clear that local government revenues would be included in these significant cuts.
The Governor’s Budget Address confirmed this to be true.
Additionally, the Governor appeared to exclude public safety personnel from future pension reform efforts pursued by the Administration.
Here are the key provisions quoted from the Governor’s speech that affect local governments:
Local Revenue Reductions
Governor Rauner is proposing that Local Government Distributive Fund (LGDF) revenue be reduced by 50 percent. LGDF is shared state income tax money. Municipalities presently receive 8 percent of total state income tax collections. From the speech:
“While the state tightens its belt, so too must local governments and transportation agencies.
“The amount of money transferred to local governments has grown 42 percent over the past decade. The state currently transfers $6 billion every year to local governments. Those governments are currently sitting on more than $15 billion in cash reserves.
“The reduction in local government sharing in this budget is equal to just 3 percent of their total revenue.
“Along with this modest cutback, our turnaround reforms will reduce unfunded mandates, and give local governments and voters the tools to save hundreds of millions of dollars through consolidation, employment flexibility and compensation restructuring.”
Transportation Spending Reductions
“Similarly, waste and inefficiency can be cut from the complex web that comprises our public transportation structure.
“Statewide, our public transportation agencies spend billions of taxpayer dollars.
“Our budget reductions for the state’s largest transit agency amount to less than 5 percent of its overall budget, and here, too, the proposals in our turnaround agenda give our transportation entities the tools to save hundreds of millions of dollars.”
The Governor proposed enrolling active government employees into Tier 2 with respect to their future pension service accruals.
“Our top priority for financial reform must be our pension system. That is true regardless of the Supreme Court’s decision on SB 1.
“Even if our pension systems were fully-funded, taxpayers would still be on the hook for $2 billion.
“But our pension systems are not fully-funded. They are $111 billion in the hole – the worst pension crisis in America.
“As it stands right now, one out of every four dollars taken from taxpayers by the state goes into a system that is giving more than eleven thousand government retirees tax-free, six figure pensions worth as much as, in one case, $450,000 per year.”
“The Governor also identified public safety employees as deserving of special consideration.
“But moving forward, all future work will be under the Tier 2 pension plan, except for our police and firefighters.
“Those who put their lives on the line in service to our state deserve to be treated differently, and I believe the public will stand with me in this single case of special treatment.”
Illinos Municipal League Reaction
Quite obviously, the IML has always been, and remains, a strong advocate for state-shared municipal revenues.
We intend to work with the Administration and General Assembly with the goal of protecting this vital source of municipal revenue.
In advance of the Budget Address, IML Executive Director Brad Cole sent a letter to the Governor and members of the General Assembly to emphasize the importance of LGDF revenue to local communities. Aninformational document about LGDF accompanied this letter.
A statement by Executive Director Brad Cole on the Governor’s Budget Proposal can be read here.
The full text of the Governor’s Budget Address can be read here.
To calculate what a 50 percent LGDF reduction would mean to your community, multiply your population by $99 (estimated Municipal Fiscal Year 2016 per capita distribution) and divide that number in half. Please make your state legislators aware of the proposed loss with an emphasis on how it would impact your operations and service levels.