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Pritzker's proposed state budget cuts millions for municipalities

Illinois state flag (WICS File Photo)
Illinois state flag (WICS File Photo)
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Gov. JB Pritzker’s proposed $41.6 billion state budget wants to cut $152 million in funding for municipal budgets across Illinois.

The cut would come from only funding 90% of the Local Government Distributive Fund (LGDF), a fund that distributes a percentage of state income tax revenues to municipalities. Those areas can use the funds however they’d like.

Currently, local governments receive 6.06% of total individual income tax collections and 6.85% of corporate income tax revenue.

"Residents are still paying the same, it's just the state taking more of it and leaving their communities behind,” said Illinois Municipal League Executive Director Brad Cole. "There will likely be a noticeable reduction that the residents of a community will see."

Cole says staff layoffs are the most likely option for cities to take, since that's one of the largest costs a municipality typically has, but city programs and services are vulnerable, too.

The City of Springfield’s Budget Director, Bill McCarty, says the COVID-19 pandemic has already put the capital city in a difficult financial spot, and the 10% cut doesn’t help.

"Anytime we're looking at having our revenues taken by the state to help balance their own budget, it's frustrating for us, there's no question about it," McCarty said.

McCarty says he expects Springfield to lose $1.2 million in total.

The Governor's Office, however, says the plan to make up for those cuts is to close corporate tax loopholes, or tax credits, which could generate $225 million for local governments.

In a statement, a spokesperson for the Governor’s Office said:

“As the governor has said, the Coronavirus Pandemic has impacted the state budget and tough choices have to be made, but he looks forward to working with the General Assembly to pass a balanced budget that lifts up working families who have suffered amid this pandemic and that continues to rebuild our economy. Cutting corporate welfare will make up for the difference in LGDF funding for municipalities and the governor hopes local leaders will support this effort.”

Cole says any money made from ending corporate tax credits should be additional funding for cities, and not a supplement for it.

The governor's FY2022 proposed budget must still pass through the Illinois General Assembly.

President Joe Biden’s proposed $1.9 trillion COVID-19 aid package includes $350 million in aid for municipal governments. The package was passed in the House of Representatives on Saturday, Feb. 27.

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