Local governments seek additional $500 million from state income tax funds | Granite City News

Brad Cole, IML Executive Director

Local governments could see an additional $500 million for their share of state income taxes, which could help fund local services and control local taxes.

The Local Government Distribution Fund, or LGDF, was instituted when the state implemented an income tax decades ago. The LGDF returns a percentage of state income taxes to local governments to prevent local governments from implementing their own income taxes.

“If the state knows what positive revenue it claims to be and there are additional resources available, then the money that is rightfully owed to local governments should be redistributed to them,” the executive director of the Illinois Municipal League, Brad Cole, center. Square.

State Rep. Anthony DeLuca, D-Chicago Heights, tried for years to restore the LGDF rate to 10%, where it was historically. The rate was reduced to 6% more than a decade ago. This year, DeLuca is considering an increase to 8% for the next budget that begins July 1.

“It’s a more reasonable number, it’s [an additional] $500 million,” DeLuca told The Center Square. “But I just don’t think it’s reasonable to ask for a billion dollars in a year.”

He said the extra $500 million would go a long way.

“Most municipalities in Illinois don’t have taxing power, they’re not self-governing, and they don’t have the ability to just create a new revenue stream,” DeLuca said.

In Sherman, village president Tervor Clatfelter said securing additional funds would go a long way.

“If that revenue is funneled back into our budget, it allows local councils to not have to raise or hold the line on any kind of property tax and even any other business tax,” Clatfelter told WMAY.

Cole agreed that local governments will use the extra money to help relieve taxpayers.

“These are dollars that would then go so municipalities don’t have to raise property taxes, so they can contribute more to pension obligations and can provide the services their communities want,” Cole said. .

Lawmakers are in session until April 8. It is expected that a spending plan, including how much LGDF will go to local governments, will be approved by then.

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