04 May

City Services Put At Risk by State Plans

There is an item of critical importance that is being discussed in Springfield right now. It is a complex issue; however, the net result could be a substantial reduction in the amount of money the City gets from the State of Illinois. Here’s the issue in a nutshell -

Prior to January of 2011, municipalities received 10% of all state income tax revenues; now we only receive 6%. That’s because after the largest income tax increase in Illinois history, Governor Quinn and the legislators decided that the state would keep all of the proceeds for itself; thereby eliminating the portion that would normally go to local municipalities.

If that isn’t bad enough, 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 local government revenue by $300 million.

The City of St. Charles currently receives approximately $2.5 million annually from the state income tax. The 30% reduction currently being discussed would cost St. Charles $800,000 annually. This money goes directly to the General Fund to pay for police, fire, public works, etc.

How the City would address this reduction in revenue? In the short term, we would use General Fund reserves to plug the hole. In the longer term, there are only 2 options – raise taxes or cut costs/services. Neither will be pleasant.

I encourage you to learn more about this issue and contact the Governor’s Office or your state legislator to express your concerns about this plan and the potential impact on City services.

You can learn more about the issue here – http://revenue.iml.org/

You can get contact information for our local legislators here -