State lawmakers grilled over income tax in Kane County

Kane County’s state lawmakers were grilled Tuesday at a legislative breakfast in Geneva, with mayors trying to gauge the impact on local governments in light of the state income tax increase and unfulfilled visions of capital projects from a year ago.

Aurora Mayor Tom Weisner and Elgin Mayor Ed Schock wanted reassurance that municipalities won’t lose out on their share of state income tax funds. Local governments receive 10 percent of the income tax revenue. However, the new income tax law says municipalities won’t receive any share of the increase. That means the local share drops to about 6 percent of individual income tax dollars and just under 7 percent of the corporate income tax dollars. While mayors said they weren’t happy about not getting a cut of the bigger pie, they want to ensure they’ll at least get the same amounts they’ve received in recent years.

A panel of state lawmakers assured them they wouldn’t support any chipping away at the real income tax dollars municipalities received. The panel included State Sen. Linda Holmes and State Reps. Linda Chapa LaVia, Keith Farnham, Mike Fortner, Kay Hatcher, Bob Pritchard and Tim Schmitz.

Along with the promise came fears that the income tax increase won’t solve all the state’s financial problems.

“It makes me nervous,” said Farnham, of Elgin, who voted against the income tax increase. “I think sometimes if we throw money out there it’s looked at as a cure-all. I don’t want to see this money just go to programs and spending goes up. Our job now is to watch the flow of this money.”

Mayors nodded in recognition of the local impact when the panel said the state is $8.7 billion behind money owed to local governments and social service agencies.

“You guys are one of hundreds of organizations that are screaming that we haven’t paid you,” said Chapa LaVia, of Aurora. “You’re just as important as our kids ... as our veterans ... just as important as all our vendors who haven’t gotten paid.”

Mayors wanted an update on when they might see some of the $31 billion in capital projects promised last year during the video gambling debates.

State lawmakers said the plan is to roll out the projects in five phases. However, much of the funding is in limbo for two reasons: One is an ongoing lawsuit over the increase in the so-called beer tax, which is collected but held in escrow awaiting the outcome of a lawsuit. The second reason is the state needs the rules and regulations for video gambling from the Illinois Gaming Board. The rules are expected in March or April.

Lawmakers said local municipalities should apply for funding now for capital projects they believe qualify for the money. Schmitz, of Batavia, said he expects the state to sell bonds soon to get some of the smaller projects going that will create local jobs. Any large projects will await the beer and gambling dollars, lawmakers said.