Preckwinkle Joins Suburban Mayors Fighting Governor's Funding Cut

CHICAGO — Cook County Board President Toni Preckwinkle joined a growing chorus of municipal leaders calling on Illinois state lawmakers to reject a proposed cut to local governments' share of state income tax revenue.

Nearly 300 municipalities in the Chicago area and two dozen state lawmakers warn that continued cuts to the funding could force towns across the state to raise property taxes on residents.

"After such a difficult year for our local governments and our local economies during the pandemic, municipalities in Cook County and across the state cannot afford additional revenue losses during this period of recovery," Preckwinkle said Wednesday at a news conference flanked by five suburban mayors.

The governor's proposed budget includes a 10 percent cut to the money municipalities receive from through the Local Government Distributive Fund, or LGDF, costing Illinois cities and villages a combined $125 million. The fund was established in 1969 as part of a deal in Springfield that established the state's flat income tax, and, the next year, the state's new constitution codifying that local governments could not pass their own income taxes.

"Local government distributive funding is not discretionary money, this funding goes toward projects and long term [investments] that would save taxpayers money over time," Preckwinkle said. "Investments such as infrastructure, building roads, bridges, water and sewer and stormwater systems, public safety, implementing police reforms, training costs and body cams for example, growing public safety pension costs, economic development — helping our local businesses and communities rebuild post-COVID [and] reducing our local property tax burden."

Local governments received 10 percent of LGDF money from its creation until a 2011 income tax hike, when state lawmakers cut the municipal share to keep the extra cash in state coffers. Prior to Pritzker's proposed cut, the local share stands at 6.06 percent of the state income tax for individuals, which stands at 4.95 percent for all individuals and 7 percent for all corporations in the wake of last year's abortive constitutional amendment, which would have permitted additional tax rates.

The governor's proposed budget would cut that further.

After the rejection of the tax referendum he backed, Pritzker warned of "painful" cuts or tax hikes. His administration argues his budget actually provide local governments with $228 million in addition revenue by closing what he describes as "corporate tax loopholes."

Geneva Mayor Kevin Burns said he doesn't buy it.

"Respectfully, if we are promised one thing if we support another, that train left the station a long, long time ago when other similar promises were made," said Burns, president of the Metro West Council of Government, which includes 33 municipalities.

He called on state lawmakers to pass legislation to make the fund into "an impenetrable account" so "we don't have to have this battle, respectfully, every single year."

State Rep. Anthony Deluca (D-Chicago Heights) and State Sen. Donald DeWitte (R-St. Charles) have proposed gradually increasing LGDF funding to 10 percent by 2025. It picked up only two co-sponsors and was to the Rules Committee in March with no further action expected.

Earlier this month, leaders of the DuPage Mayors and Managers Conference, Lake County Municipal League, McHenry County Council of Governments, Metropolitan Mayors Caucus, Metro West Council of Government, Northwest Municipal Conference, South Suburban Mayors and Managers Association, Southwest Conference of Mayors, West Central Municipal Conference and Will County Government League sent a letter to Pritzker seeking a meeting to discuss how to increase the local share of LGDF.

And last week, a group of two dozen state lawmakers sent letters to the governor urging him to "take advantage of the opportunity that the State has to make good on its promise to Illinois residents."

Restoring the municipal share of state income tax would lessen local governments' reliance on property taxes, they said.

"This is of particular concern among the growing list of municipalities and counties that are suffering from lost sales taxes, limited alternative revenue sources and increased local property tax burdens," the lawmakers said. "For the vast majority of communities, the only way to make up for lost revenue is to raise property taxes."

Highland Park Mayor Nancy Rotering said her city had to lay off more than two dozen employees last year and stands to lose out on $300,000 from the proposed LGDF cut.

"Every year, Illinois cities and villages are challenged to balance their budgets and have done so by living within their means, making sacrifices, cutting services and doing more with less. This year more than ever, we're feeling the squeeze of having to do more with less," said Rotering, who represents 43 municipalities as president of the Northwest Municipal Conference.

"Last year, faced with an estimated $11 million COVID-related shortfall, we reduced our staff by 10 percent and put millions of dollars of important infrastructure projects on ice, all in an effort to balance our budget. Everyone was stretched, programs were cut and we continue to feel the pinch."

Hazel Crest Village President Vernard Alsberry appeared on behalf of 45 south suburban communities as past president of the South Suburban Mayors and Managers Association.

"Like many other municipalities, we are dependent on LGDF funds to lessen the property tax burden on our homeowners, and keep our municipalities running and operating with basic services," Alsberry said.

"That includes police and fire protection, critical water and transportation infrastructure, maintenance, garbage pickup, snow removal and more. All services that impact the local quality of life for residents and the attractiveness of our communities and our business investments."

Palos Park Mayor John Mahoney, treasurer of the Metropolitan Mayor's Caucus, said his town stood to lose out on about $50,000 from the proposed cut.

"It has been suggested that local governments will be made whole through the American Rescue Plan," Mahoney said. The $1.9 trillion relief bill that passed Congress in March is set to provide Illinois municipalities with $5.2 billion.

"While local governments welcome federal money through the American Rescue Plan, those dollars amount to a one-time disbursement that are restricted to dealing with COVID-19 related revenue losses," he said. "In other words, the federal aid does not replace LGDF dollars and fails to solve the long-term structural problems that exist."

State lawmakers have until the end of the month to pass a budget with a simple majority. After that, a supermajority is required.

So far, here are the lawmakers who have signed on to DeLuca and DeWitt's letter calling for a restoration of the local LGDF share to 10 percent:

• Melinda Bush (D-Grayslake)
• Thomas Culerton (D-Villa Park)
• John Curran (R-Downers Grove)
• Suzy Glowiak Hilton (D-Western Springs)
• Laura Murphy (D-Des Plaines)
• Donald DeWitte (R-St. Charles)
• Dale Fowler (R-Harrisburg)
• Steven Landek (D-Bridgeview)
• Robert Martwick (D-Chicago)
• Julie Morrison (D-Deerfield)
• Craig Wilcox (R-McHenry)
• Fred Crespo (D-Hoffman Estates)
• Anthony DeLuca (D-Chicago Heights)
• Daniel Didech (D-Buffalo Grove)
• Debbie Meyers-Martin (D-Olympia Fields)
• Suzzane Ness (D-Crystal Lake)
• Chris Bos (R-Lake Zurich)
• Amy Grant (R-Wheaton)
• Mark Luft (R-Pekin)
• Tony McCombie (R-Savanna)
• Martin McLaughlin (R-Barington Hills)
• Ryan Spain (R-Peoria)
• Bradley Stephens (R-Rosemont)