Illinois Cities To State: Hands Off Our Taxes

May 16, 2018

Illinois lawmakers have two weeks to get together a spending plan. Officials from cities across the state are going on the offensive to keep lawmakers from balancing the budget by raiding their pockets.

The DuPage Mayors and Managers Conference launched a video series and website – ProtectMyTown.us –  to highlight how a proposed cut in their share of state income taxes would affect their residents.

“Springfield’s power play doesn’t fix the state’s problems but merely shifts the responsibility ultimately onto local taxpayers,” says a new video series launched by the group.

On Wednesday, mayors from Springfield, Decatur and Jerome testified before a state Senate committee on the same topic.

By law, cities get a portion of the money the state collects from income taxes. Illinois cut that by 10 percent last year, and the governor is proposing to continue it this year. Cities are fighting to keep that money.

The change would net the state about $130 million. But mayors say it could mean eliminating essential services for their residents.

“Police, fire, public works, stormwater, snowplowing, garbage pickup, I like to call it sirens and snowplows and sirens,” said Martin Tully, the mayor of Downers Grove, whihc is 25 miles west of Chicago. “These are the kinds of things that people expect every day.”

Downers Grove would see a cut of around $450,000 annually, according to Tully, out of an operating budget of around $47 million.

For Decatur, Mayor Julie Moore Wolfe said the cut last year left a $1 million gap in a budget of $70 million.

Tully says the reduction would leave mayors like him with two options: reduce services or raise the funds another way, for example through a property tax hike.

But why does Illinois share the money it gets from taxpayers? As state Sen. Mike Hastings explained in the Senate budget hearing, it’s an agreement reached nearly half a century ago.

When then-Gov. Richard Ogilvie wanted to institute a statewide income tax, he compromised with Chicago Mayor Richard J. Daley and others to share some of the cash and in exchange, cities would not levy a local income tax.

As Illinois’ finances have gone from bad to worse, lawmakers have skimmed some of that revenue or refused to share additional money from tax hikes.

And last year, they did both — pushing through a budget over the governor’s veto that upped the income tax and cut cities’ slice of the pie. On top of that, they’re taking a bite out of local sales taxes through a 2 percent administration fee.

The Rauner administration says it just want to continue the cut Democrats made last year, though the governor has proposed even deeper cuts in the past.

One of his top allies in the legislature, state Sen. Chapin Rose, called out Democrats who are crying foul after supporting the cuts last year.

“Just to be clear anyone who is now worried about their mayors back home should have been just as worried last year before they voted for it,” Rose said.

Democrats are quick to point out that they also speeded up the payment cycle – so cities would get the money more quickly. They also said they promised the cut would be for just one year.

The blame game aside - Republican state Sen. Jim Oberweis says the money has to come from somewhere.

“If we don't want to cut this amount of money here - where should we cut it? Should we take it from K-12 education; should we take it from higher education? Should we reduce Medicaid?” he asked.

Still, a fiscal watchdog group, the Civic Federation, criticized the proposal - particularly as cities have to deal with rising police and fire pension costs.

“It’s not reasonable for the state of Illinois to think they can solve their financial problems by pushing their problems down on local government and that somehow will not have a negative impact on the state of Illinois as a whole,” said Laurence Msall, executive director of the Civic Federation.

Both Springfield Mayor Jim Langfelder and Decatur's Wolfe said all of their cities’ property tax dollars go toward pension payments. That leaves less revenue to pay for other services. 

While state politicians fight it out, mayors say they’re taking the message directly to their residents. The Protect My Town site encourages visitors to send an email to legislators to voice their opposition to the cuts.

They only have a few weeks to make their case before lawmakers are expected to vote on a budget.