I.M.L. Working to Get Municipalities Full Share of Income Taxes From the State

By Jeremy Coumbes on March 11, 2020 at 2:33pm

The Illinois Municipal League is working with mayors in the state in an effort to see that city governments receive the full amount of state income tax revenue owed to them.

When Illinois enacted the state income tax in 1969, local governments received 10% of all income tax collected by their municipality. Brad Cole, Executive Director of the Illinois Municipal League says that “ Since 2011 the local share has been reduced and that reduction has, in part, placed a significant financial burden on Illinois communities.”

Local governments have received approximately 5.757% of the total collected since the state reduced the the amount in 2011 during the state’s continued financial crisis.

Jacksonville Mayor Andy Ezard says that he appreciates the I.M.L. advocating for their cities with the General Assembly as many struggled to keep capitol improvement projects going forward with the loss of revenue from the state.

The cities kind of took the burden on, and we are already all paying for it, it’s just how it’s distributed, so it’s not a burden on the taxpayer it’s just how the state distributes it and if we can get our full share back up then we can do more things locally with the money, more infrastructure projects more street improvements, more sidewalks, more park improvements, just you name it, it would really help out the municipalities.”

In 2019 the city of Jacksonville received just over $2 million in income tax revenue from the state. If the amount were increased back to the full 10% it could mean upwards of $1 to $1.5 million in additional revenue for the city.

Ezard says that even though local governments budget according to recent revenue streams, there are still issues that can come up from outside that the full tax amount would help municipalities cover.

A lot of times, folks don’t understand that we get mandated by the state or the federal government on many things and it’s a trickle down that ultimately we pay for locally, and this would really help turn that if we could get back to the level where we once were where we can see some projects through.”

At the state level, Governor J.B. Pritzker’s budget proposal calls for municipalities to receive the current amount of income tax revenue from the state. His proposed graduated income tax would factor into the revenue proposal, as Pritzker’s plan proposes holding $1.4 billion of state spending in reserve, including 5% of the income tax money from municipalities, according to the State Journal Register, in Springfield.

Cole says that the IML has not taken a position on the graduated tax but will continue to advocate that regardless of the out come, Illinois municipalities need to receive their full local share, and not be subject to further cuts or instability from the state.