A bill passed the Illinois House of Representatives a few weeks ago that would increase the share of state income tax revenue that goes to municipalities.
The bill, cosponsored by, among others, Michael Zalewski (D-Riverside) and Silvana Tabares (D-Chicago) would gradually increase the portion of individual state income tax revenue going to municipalities from the current 8 percent back to the 10 percent that existed before a temporary increase in the state income tax was passed in 2011.
However, with the cash-strapped state facing a backlog of nearly $13 billion in unpaid bills and now in its third year without a budget, the chances of the bill becoming law seem remote.
The bill is now in the state Senate which appears to be in no hurry to take up the measure.
“As a mayor we’d love to have more funding on the local level,” state Sen. Steve Landek, who also serves as the Mayor of Bridgeview. “However, being realistic, the state doesn’t have any money to give anybody. We can’t pay our bills let alone increase the funding level.”
Landek pointed out that the even if the bill passed the Senate, Gov. Bruce Rauner would probably veto it.
The bill passed the House on March 7 by a vote of 67 to 47, gathering only three Republican votes. It would take 71 votes in the House to override a veto by the governor.
Zalewski said the bill is an attempt to put municipalities back in the position they were before the legislature cut the percentage state income tax revenues several years ago.
In 2011, the percentage of income tax revenue going into the Local Government Distributive Fund (LGDF) was cut from 10 percent to 6 percent, so the state would get all the additional revenue raised by a temporary hike in the state income tax rate that was passed in 2011 and expired in 2014.
In 2015, the share going to the LGDF was upped to 8 percent. The bill that passed the House a few weeks ago would increase the percentage of state individual income tax revenue going into the LGDF to 8.5 percent this year, to 9 percent in 2018, 9.5 percent in 2019 and finally 10 percent in 2020.
“Without this, it makes it exceedingly difficult to provide quality services at a municipal level,” Zalewski said in a press release announcing his support of the bill. “We must restore funding levels back to the original amount. Our communities provide services, but it becomes difficult to do without the proper funds.”
Riverside Village President Ben Sells naturally would be happy to get more money from the state.
“Rep. Zalewski understands that the strength of our state flows directly from the strength of our communities,” Sells said in a statement. “The LGDF was established as a mechanism to efficiently share taxpayer dollars with towns and villages that provide direct, basic services to our residents.”
Money from the LGDF provides about 10 percent of the operating budget of Riverside, Brookfield, but only about 4 percent of the operating budget in North Riverside.
LGDF money is distributed to municipalities based on population and local governments can use the money as they wish. The money typically goes into a village’s general fund and is used to help pay for core services.
Riverside received $863,928 from the LGDF in 2016 which amounted to 9.4 percent of its operating budget.
“Obviously LGDF is extremely important to communities, especially non-home rule communities where there are tax caps and other limitations imposed upon us,” said Riverside Village Manager Jessica Frances.
Brookfield received a little over $1.8 million from the LGDF in 2016 which amounted to a little more than 10 percent of its operating budget.
The Village of North Riverside is on track to receive about $625,000 from the LGDF this year after receiving from between $650,000 and $700,000 in recent years, North Riverside Finance Director Sue Scarpiniti said.
