City and county leaders in McLean County said Wednesday one of Gov. JB Pritzker's budget proposals is a bad idea.
The governor has proposed taking 10% of the income tax money it currently shares with cities, towns, and counties through the Local Government Distributive Fund.
Normal Mayor Chris Koos said the proposal is ruinous.
"This will be crippling to municipalities across the state of Illinois if this is to go through. We're already seeing a significant decrease in revenues because of COVID-19 and this is just another slap to cities," said Koos.
Koos said the proposal breaks a decades-old deal with the state.
"When the state income tax was instituted, there was a grand bargain made with municipalities all across the state of Illinois that they would get this share in support of passing this tax," said Koos.
The Town of Normal gets $5.6 million a year through the income tax sharing arrangement; the city of Bloomington more than that. McLean County gets about $2 million per year.
Bloomington Mayor Tari Renner said it's an odd thing for a Democratic governor to propose.
“It's the kind of thing that we saw under (GOP Gov. Bruce) Rauner in the past. I think most mayors would say they would like the state of Illinois not to balance their budget on the backs of cities. We have enough difficulties with COVID and other issues right now," said Renner.
Renner said the money from the income tax goes into the city's general fund and has helped Bloomington keep its property taxes stable since 2008.
"In order for us to stay away from property taxes and to stay away from other kinds of revenue sources that might not be as productive, I would hope that this does not pass the legislature," said Renner.
The proposed reduction must go through the legislature and could change. But McLean County Board Chair John McIntyre said the planning assumption has been that the reduction will be about 10% of the total.
"Any of those cuts are devastating to us because we're pretty much bottom line. We try to operate fairly bare bones in our situation." said McIntyre.
Ten percent also is what counties and municipalities lost in 2017 as a budget balancing measure.
Koos said local government units did eventually get half of that back.
"We've fought that for years. There have been attempts to get into that fund and they have taken a portion of it previously to balance their budget. This on top of years and years and years of pension enhancements and unfunded mandates that the state legislature hands us that we have to come up with the money to fix," said Koos.
He said the proposal, if approved, is likely to make it even tougher to meet pension funding obligations and likely would require further service cuts for citizens.
Officials in the governor’s office said they expect that cut to be offset by gains they municipalities would realize through the closing of corporate tax loopholes.
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