Editorial: State should boost fund to municipalities and help control property taxes

  • Legislation proposed in Springfield would increase the share of state income tax revenue that municipalities and counties receive.

    Legislation proposed in Springfield would increase the share of state income tax revenue that municipalities and counties receive. Capitol News file photo

 
Daily Herald Editorial Board
Posted1/18/2022 1:00 AM

Costs are rising for all of us.

Inflation has increased the price of everything from gas and groceries to new and used cars, and it seems inevitable that as those expenses hit municipal governments in the coming year, they will be looking for more revenue. For homeowners, that could mean higher property taxes.

 

However, there is something that Illinois lawmakers could do that would help reduce the pressure on property taxpayers. They could restore local income tax revenue that the state has used to fill gaps in its budget.

Local governments have long received a share of the state income tax revenue collected in their areas. But more than a decade ago, Illinois started reducing the amount that municipalities and counties receive from the Local Government Distributive Fund.

So while local governments at one time received 10% of the income tax revenue in their areas, that number has been reduced to just over 6%. Now municipalities are urging state lawmakers to restore some of that revenue.

The DuPage Mayors and Managers Conference, an organization representing 35 municipalities, says income taxes collected by the state and distributed back to local governments account for between 10% and 20% of a town's operating budget.

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Those dollars help pay for essential services, such as police and fire protection, road repairs, flood prevention, garbage collection and snow removal.

Last year, a group of suburban mayors and Cook County Board President Toni Preckwinkle were among those who successfully fought against further reductions to the Local Government Distributive Fund.

"Every dollar cut from LGDF places an increased financial burden on our members," said Darien Mayor Joe Marchese, who is vice president of the DuPage Mayors and Managers Conference. "Municipalities depend on LGDF to not only ensure we can provide essential services but to lessen the burden on homeowners and businesses who pay property taxes."

Some state lawmakers have gotten the message. New legislation calls for increasing the local share of the income tax revenue to 8%.

"This is needed by every community, some more than others," said Westmont Mayor Ron Gunter, president of the DuPage Mayors and Managers Conference.

Could Illinois afford to give an increased share of income tax revenue to municipalities and counties? We will probably find out when the governor unveils his proposed budget. But thanks to an influx of money from the federal government, the state's finances should be in better shape. We can't think of a better time for municipal leaders to seek this change.

Illinois will get income tax dollars from us no matter what. State lawmakers are always calling for property tax relief, but rarely offer concrete proposals to provide it. The funding for local governments is one concrete way they can help communities pay for the local services on which we rely.

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