Editorial: Don't fix state budget at expense of our towns

Most suburbs took it on the chin in this pandemic year, with income millions of dollars lower than usual from taxes on goods, food and beverages, hotel rooms, gasoline and more.

But you wouldn't expect local leaders to turn around and ask their residents and business owners - who also are hurting - to cough up more.

By the same token, the state of Illinois shouldn't try to cure its revenue shortfall by hitting up cities and villages.

Yet, that's what Gov. J.B. Pritzker's proposed budget would do.

The state has its eye on the Local Government Distributive Fund, which is local governments' share of income taxes collected by the state. The governor's budget proposal included another 10 percent reduction in what towns get.

It isn't the first time.

While Illinois' flat income tax is in the state constitution, the amount of the local share unfortunately is not. Originally set at 10% of the amount collected by the state, the percentage for local governments has seesawed between about 6% and 8% since 2011.

Illinois has found other ways to nickel and dime our towns. It imposed an administrative fee in 2017 - initially 2%, but later 1.5% - charging local governments for the state's collection of local sales taxes. At the same time, state law prohibits local governments handling collections themselves.

We're not unsympathetic to the plight of state budgeters and the unpalatable job of coming up with cutbacks following the failure last fall of a referendum seeking higher income tax rates for the rich. Illinois government pays for a lot of important things, including roads, prisons, health care, child protection, education and the social services that were nearly flattened during the prolonged budget impasse when Bruce Rauner was governor.

This time, people in the governor's office said municipalities would make up the proposed Local Government Distributive Fund cut through closing of corporate tax loopholes also in the budget proposal.

Maybe. But the thing is, the state has to be straight with local governments and not play a constant shell game.

Cities and villages need to be able to count on stable funding, and they need to trust the state as a partner in serving their residents.

The Local Government Distributive Fund is important to the suburbs. To give one example, it pays for almost 10 percent of Elmhurst's budget, Mayor Steve Morley told Capitol News Illinois. Overall, the state would keep $152 million owed to local governments around the state.

Lawmakers, when they ultimately vote on a state budget next month, should take further cuts to this local revenue source off the table.

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