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'The timing is right': Suburban mayors seek greater share of state tax money

Suburban mayors are again asking Illinois lawmakers to boost the amount of state income tax revenue doled out to municipal governments, and they see this legislative session as their best opportunity in years to get back a larger piece of the funding pie.

For decades, towns and counties have received a share of the state income tax dollars paid by their residents and businesses. But to bolster its budget, the state since 2011 has gradually chipped away at the tax revenues funneled back to municipalities through the Local Government Distributive Fund.

Before then, the state distributed 10% of the total income tax haul each year to local governments. The state currently allocates just more than 6% of individual income tax collections for the local fund, according to the Illinois Municipal League.

In what's become a familiar refrain, municipal leaders have sought to restore some of the funding to help pay for road repairs, pension costs, flood prevention and other essential services.

But an improved outlook for the state's finances could alter the equation. In his budget address, Gov. J.B. Pritzker announced Illinois will end this fiscal year on June 30 with a $1.7 billion projected surplus.

"The timing is right. The Illinois economy is strong," said Palos Park Mayor John Mahoney, chairman of the Metropolitan Mayors Caucus, which represents 275 municipalities.

The mayoral association has joined about a dozen other regional organizations to form a "Restore LGDF" coalition. The group held a news conference Wednesday to promote their cause.

Chicago-area mayors say they've gained broad political support in Springfield for legislation that would raise the local share of income tax revenue to 8%. The bill, introduced by state Rep. Anthony DeLuca, a Democrat from Chicago Heights, has about 50 co-sponsors in the Illinois House.

"We feel this is a reasonable proposal that would provide our communities greater fiscal stability and the increased ability to address current and future challenges," said Highland Park Mayor Nancy Rotering, president of the Northwest Municipal Conference.

Pritzker addressed the issue last week speaking in Rockford. Since taking office, the state has added "about $1 billion more on an annual basis to the coffers of cities across the state, not through the local distributive funds specifically, but through lots of other things," Pritzker said.

The Democratic governor pointed to local tax revenue from legal marijuana sales and the opening of a temporary casino in Rockford. A permanent Hard Rock casino will be built in Rockford under the state's gambling expansion. Local governments also are getting more dollars to put into local roads, Pritzker said.

"But let me be clear, we should always try to do more for local governments because there's so much more that needs to be invested in," he said.

But some mayors say partially restoring the Local Government Distributive Fund to an 8% share of all income tax collections would provide a stable revenue source and lessen reliance on property taxes.

Cuts to the fund have left the city of Highland Park with a budget hole of more than $2 million a year, Rotering said.

"Those millions of dollars can fix water mains and roads," she said. "They can help us mitigate ongoing flooding, which annually threatens our residents and our businesses."

In Darien, income taxes collected by the state and distributed back to the city accounts for 14% to 15% of the municipal budget, Mayor Joseph Marchese said. The proposal to allocate 8% of total state income tax proceeds to the Local Government Distributive Fund would translate into $500,000 to $600,000 more for the city, Marchese estimates.

"It's going to be enough to help our communities to overcome and come out of this pandemic that we still live with," said Marchese, president of the DuPage Mayors and Managers Conference.

Pritzker's budget plan includes no proposed reduction to the current LGDF funding.

Illinois Gov. JB Pritzker Justin L. Fowler/The State Journal-Register via AP
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