A broad-based coalition of local governments statewide is joining Illinois lawmakers in calling for the State to increase local revenue funds to lessen the property tax burden on homeowners.
Since 1969, local governments across Illinois have received a portion of income taxes generated by residents and businesses, known as the Local Government Distributive Fund. For years, the State allocated 10% of total income tax collections to local governments through LGDF, but since 2011, it has gradually reduced their share to just 6.06% today.
Executive Director of the Illinois Municipal League Brad Cole says county governments and municipalities need that money to continue to provide services directly to people who pay the taxes: “Municipalities have been receiving less and less funding from the state and more and more unfunded mandates, so we are just simply requesting that our funding be returned to the level that it was previously and help us do the work at the local level that residents require…The reasoning in the past [that we’ve been given about the reduction in funding] has been because the state needed the money. Now, we are seeing where there are more dollars available for the state so we are seeking to have that [funding] returned so that local governments don’t have to increase local taxes and fees.”
Cole says its an annual issue of whose money is it and how much of it is actually going to be provided to municipal governments. Cole says the stripping away of funds hits the smallest communities in the state the hardest: “Certainly the smallest communities have the fewest resources to be able to handle their problems or address their issues. Very small communities only have state-shared revenues and property tax, so those only go so far. When one of them is cut, the other is left to carry the burden. For very small communities that need to replace their infrastructure – whether it’s water and sewer or sidewalks, or anything else – when the Local Government Distributive Fund is cut or when it’s not fully funded at what was the 10% level, then those things go without getting done.”
IML is just one of 12 other organizations pushing for the restoration of the LGDF to help bring stability to local government budgets across the state. In its most recent proposal, the coalition is asking that the 10% level of funding be restored by 2025.