Letter to the Editor: State Should Not Take More Money From Local Communities

The State of Illinois has difficult decisions to make with the tax dollars you pay. The General Assembly faces a substantial budget deficit of its own making. State legislators and the Governor have already increased the personal and corporate income tax rates to try and bring the state’s debt under control. This income tax increase will not be enough to balance the state budget. And taking the rates up even higher is not politically possible.

The General Assembly and the Governor will therefore be looking at other sources of revenue. This has already begun. As part of the income tax increase approved in early January of 2011, the General Assembly and the Governor reduced the amount of money that is collected on behalf of local governments and returned to Illinois communities. Until January of 2011, municipalities and counties received 10% of all income tax revenues. Now they only receive 6% of these dollars because the state decided to keep the entirety of the increase for itself. This means that local communities, by an action already taken by the General Assembly and Governor, will lose a staggering $2.7 billion from FY2011 to FY2015. 

Because of recessionary revenue declines, cities and counties have been making draconian cuts to personnel and services to balance their budgets for several years. But now plans are being discussed in Springfield to take away additional revenues from Illinois communities. The General Assembly wants to reduce, or possibly eliminate, the remaining dollars collected by the state on behalf of local governments. One proposal would reduce state-collected local government revenue by $300 million statewide. This would be in excess of $430,000 for the Village of Montgomery. This is money that is used by our community to pay for critical core services such as police, roads and snowplowing. Further cuts will undoubtedly undermine the safety and well-being or our communities.

State-collected local government revenues belong to local governments and are simply collected by the state on their behalf. These dollars are probably the best return on investment that taxpayers will ever get. This is because these revenues are spent on core services that taxpayers see and use every day. The state must not reduce these revenues any more than they already have!

Local municipalities did not create, nor did they contribute toward the state debt situation. We can’t solve the state’s fiscal problems by destroying local budgets and spreading the fiscal problem even wider.

Respectfully,

Marilyn Michelini

Village President

Village of Montgomery