Illinois Lawmakers Move to Send More State Funds to Local Municipalities

Illinois Lawmakers Move to Send More State Funds to Local Municipalities

SPRINGFIELD (IRN) — Illinois lawmakers unanimously approved of legislation that would gradually send more state income tax revenue to local cities and towns even though it would happen at the cost of the state’s woefully unbalanced budget.

Illinois collects personal and corporate income taxes and then sends just over six percent of that to local municipalities, totalling around $1.3 billion in personal and corporate income tax annually.

If signed into law, Rep. Anthony DeLuca’s bill would see the LGDF increase from 6.06 percent to 8.5 percent in 2020, 9 percent in 2021, 9.5 percent in 2022, and remain at 10 percent after February 2023. The percentage of corporate income tax, which is a higher percent but accounts for less of the total distribution, would scale up to 10 percent as well.

“This is so important for our municipal governments,” DeLuca, D-Chicago Heights, said.

“They’re having a difficult enough time as it is trying to pay their pensions and operate a professional police department and professional fire department.”

LGDF funds account for a relatively small amount of revenue for larger cities but it can be significant for smaller towns.

Rep Brad Halbrook, R-Shelbyville, is concerned about the strain that sending hundreds of millions of dollars out of an already-unbalanced budget would affect the state.

“I understand that there’s this kind of balancing act but how do you deal with, potentially over six years, being a billion dollar-pressure to the state budget,” he said, still voting for the bill to move it to the House floor for further debate.

Budget hawks say the LGDF subsidizes bloated local governments at the expense of property taxpayers.

The same bill received a favorable House vote last year but wasn’t acted upon in the Senate.