The village boards of both Riverside and Brookfield have officially passed resolutions opposing any reduction by state of Illinois income tax revenue distributed to municipalities annually as part of the state’s Local Government Distributive Fund.
Riverside trustees voted unanimously to support the resolution at the village board’s meeting, March 5, with Brookfield’s board following suit, also unanimously, on March 9. The resolution declares that the state “has a legal obligation to collect income tax revenues on behalf of local governments and to distribute those revenues on a shared basis.”
In addition, the resolution states that the proposal to diminish funds shared through the Local Government Distributive Fund “if enacted, would degrade local infrastructure and public facilities, eliminate jobs, require cuts in programs and services, increase debt, raise property taxes and negatively impact the health, safety and general welfare of Illinois citizens.”
During a speech before the Illinois General Assembly regarding the state’s budget woes, Gov. Bruce Rauner, Feb. 18, called on the state legislature to slash the revenue shared with municipalities in half.
Saying that municipalities were sitting on billions in cash reserves, Rauner called on local leaders to make a sacrifice.
“While the state tightens its belt, so too must local governments and transportation agencies,” Rauner said in his speech.
That statement drew howls of protest from local leaders, who said municipalities already had been tightening their belt while state government failed to do the same.
“We’ve been doing that for years,” said Brookfield Village President Kit Ketchmark, referring to personnel and service cuts experienced in Brookfield since an economic recession hit the nation in 2008.
They also chided the governor for giving the impression that state shared tax money distributed to communities was a gift. On the contrary, they said, those taxes belonged to the residents of Illinois municipalities and that the state merely collected those taxes on their behalf.
Also on March 9, the Illinois State Senate convened an appropriations committee hearing on the state’s fiscal year 2015-16 budget in Chicago.
Municipal leaders from Chicago and the suburbs, including Riverside Village President Ben Sells, packed the meeting. Sells also submitted written testimony to the committee, urging them to “reaffirm our state’s commitment to its towns and villages by protecting local government revenue.
“Our towns and villages are the vital cells of our state’s well-being,” Sells wrote. “If they weaken, the entire body politic suffers. That is why local revenue sharing was established to begin with, as an affirmation that keeping our towns and villages strong is a basic civic responsibility. …
“The basic services that local governments provide are precisely what our tax dollars are meant to fund. To misdirect local revenue away from its intended purpose would be a breach of the trust that we owe one another.”
The Local Government Distributive Fund (LGDF) was established in 1969 as part of the state’s income tax law and provides critical funding for municipalities, most of which have limited taxing authority. LGDF funds are distributed to municipalities on a per capita basis, much like the state’s motor fuel tax, which is collected by the state and then distributed back to municipalities to help fund road improvements.
If enacted, according to Riverside officials, the village would stand to lose about $430,000 in LGDF revenues, which fund day-to-day services. Brookfield would stand to lose almost $940,000, according to the resolution passed by the Brookfield Village Board on March 9.
North Riverside would lose about $250,000 in revenue if the governor’s proposal is enacted.
“If we were to see a $900,000 hole in the budget, we’d have to do very serious looking at where we’re spending and different capital programs as well as, probably, personnel as well,” said Brookfield Village Manager Keith Sbiral.