(The Center Square) – With the U.S. Senate preparing to take up a $1.9 trillion COVID-19 relief package, the Illinois Municipal League wants local governments, not the governor, to control dollars local governments are meant to get.
City officials across Illinois have either passed annual budgets or are in the process of approving how they’ll spend tax dollars. Some of that spending is based on how much Local Government Distributive Fund dollars will be released by the state.
Illinois Municipal League Executive Director Brad Cole said LGDF is important because it’s the local governments’ share of income tax dollars the state collects. The governor’s proposed budget for the fiscal year that starts July 1 continues cuts from previous years.
“All when more and more state mandates and unfunded mandates are being placed on local governments,” Cole said. “So it’s the local share of state income tax, and it’s been reduced, and reduced and reduced, and this proposal takes us to about half of where we were originally and it’s a 10% cut from this current year.”
Cole said local governments were supposed to get 10% of LGDF from when Illinois approved an income tax decades ago, but now it’s down to about 5.5% overall.
The federal spending plan the U.S. Senate could take up this week could include $7.5 billion for the Illinois state budget and an additional $5.7 billion for local budgets. Cole doesn’t want Gov. J.B. Pritzker to capture dollars meant for local governments as was done last year.
“If there is a federal relief package, we’re hoping the money will flow directly to communities and without additional restriction put on by the state which was the case with the federal CARES Act last year,” Cole said.
If federal funds are distributed directly to locals, Cole said the state shouldn’t use that as an excuse to cut state funding for local governments.
“That money can’t be in lieu of our regular state-shared resources that provide for the operations of the community just in regular times,” Cole said.
The governor’s proposed state budget has around $152 million in cuts for local governments statewide unless state lawmakers approve ending $930 million in tax incentive programs. Cole said even if those incentives were closed, there’s no guarantee the state would generate that much money.