Mayors: Rauner cuts could lead to property tax hike
Suburban mayors testified before an Illinois Senate hearing Monday that a proposed reduction to their share of state income taxes could mean drastic cuts to public services like police and fire protection, or an increase in local property taxes.
Gov. Bruce Rauner has proposed cutting half the money municipalities receive every year from income taxes as one part of a budget proposal aimed at addressing the state's troubled finances. He's argued many towns have healthy reserve funds that can be used to cover the loss of income tax revenues.
Municipalities across the state currently share in a pool of 8 percent of income taxes. Rauner's proposal would set that at 4 percent starting July 1.
Mayors from across the suburbs filled a senate appropriations committee hearing room in downtown Chicago to express their opposition to Rauner's plan.
Hanover Park Mayor Rodney Craig said the local governmental distributive fund has been a reliable source of revenue for his town, comprising 12 percent of the village's general fund.
Taking those funds away, he said, would mean a $3.7 million hit to the village's budget.
And to make up the difference would be the equivalent of a 13 percent property tax levy increase.
“That's not even fathomable,” Craig said. “My constituents would be greasing the rail of the car and I'd be on it.”
If the state funding cuts are approved, Craig said he and other village officials would begin looking at all aspects of the town's budget, from reduced snow plowing, to removing a fire engine from service.
“I want to make sure we have this relationship and understanding of what it takes to run a municipal government,” Craig told legislators.
Downers Grove Mayor Martin Tulley, who is president of the DuPage Mayors & Managers Conference, said his town would have to make up the difference by cutting services, increasing property taxes, delaying projects, or laying off village staff. He compared the situation today to when the village made $2.4 million in recessionary cuts five years ago. Nearly half of the village's staff was eliminated, and funding for the D.A.R.E. program and arts initiatives was cut.
“We're going to have to do more and more, until we can do nothing,” Tulley said.
State Sen. Chris Nybo, an Elmhurst Republican, suggested in exchange for cuts to the local share of funds, the state could give municipalities flexibility in spending more hotel tax revenues, and relief on so-called unfunded mandates.
“We're going to have to make some very tough choices and unfortunately municipalities are going to be a part of those hard choices. Everyone is going to have to take a haircut,” Nybo said. “I don't look forward to making these decisions, Mayor Craig and Mayor Tully, but I think they're going to have to be made.”