As the details of the Illinois General Assembly’s budget deal began to filter out in the past week or so, local governments are now realizing that their ox may be due for an old-fashioned goring as state legislators figure out how to balance the books in the future.
Ever since Gov. Bruce Rauner took office, with his calls for property tax relief and cuts to municipalities’ share of the state income tax, local leaders have worried that the state was going to find ways to offload its financial issues onto towns and villages across Illinois.
The new state budget has begun that effort. Sure, it’s not a heavy hit at the moment, but that may be on the way as legislators figure out how to get out from under their biggest burden — pensions.
The “foot in the door,” as Brookfield Village President Kit Ketchmark put it last week, is a 10 percent cut to local disbursements from the Local Government Distributive Fund, which is funded by state income taxes.
State legislators attempted last week to soften that blow by saying towns in 2017-18 will receive a greater number of payments from the state, and on a regular schedule. Further, towns were promised they’d receive as much in the new fiscal year as in the one that just ended.
The trouble is that the towns didn’t receive everything they were expecting in 2016-17, so the 10 percent cut means fewer actual dollars that municipalities rely on to fund their day-to-day operations.
The state is also now charging municipalities a handling charge for collecting and then reimbursing towns for sales taxes that have been imposed locally, apart from the state’s overall sales tax.
Depending on how heavily a town relies on sales taxes to fund local operations, that may be a pin prick or it could be something more serious. For Riverside, the fee will amount to a few thousand dollars. But it’ll cost North Riverside close to $100,000.
We think it’s safe to say it’s no longer a question of “if” state government is going to shift some of its financial burdens onto local government. Rather, the question is “by how much?”
Rauner, for example wants to cut the Local Government Distributive Fund by 50 percent. That’d cost a village like Brookfield $1 million in revenue. The state is also looking to shift a greater share of teacher pension contributions to local school districts.
And the cherry on the sundae is that Rauner wants to be a white knight by calling for a statewide property tax freeze, which sounds great until you realize that local property taxes have to fund the obligations being passed down by the state.
The long and short of it is that local taxpayers are going to be the ones taking the hit, either through higher local taxes or reduced local services. The state’s day of reckoning has come, and Springfield reckons that villages like Brookfield, North Riverside and Riverside can deal with it.
