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* The Illinois Municipal League laid out its 2022 legislative agenda…
Restoration of Local Government Distributive Fund Revenues
HB 315 (Rep. DeLuca, D-Chicago Heights)
LGDF distributions play a role in funding critical municipal services and keeping the local tax burden low. Without LGDF, communities across Illinois would need to explore increases to other fees or taxes – including property taxes. When originally enacted, 10% of total income taxes in the state were dedicated to LGDF. Now, the state dedicates only 6.06% of individual income tax collections and 6.845% of corporate income tax collections to the fund. This proposal would incrementally increase amounts transferred from the State of Illinois’ General Revenue Fund to LGDF to 10% of net revenue realized from income taxes imposed on individuals, trusts, estates and corporations. IML is also supportive of SB 3010 (Sen. Murphy, D-Des Plaines) and HB 4169 (Rep. DeLuca, D-Chicago Heights), alternative proposals that would each increase LGDF to 8% beginning in SFY 2023.Authority to Conduct Remote Meetings
SB 482 (Sen. Castro, D-Elgin)
This proposal would permit public officials to conduct a remote meeting without the issuance of a gubernatorial disaster declaration. Specifically, this proposal would allow the head of a public body to determine if an in-person meeting is not practical or prudent or if conducting an audio or video conference is in the best interest of the public or the public body.Authority to Fulfill Public Notice Mandates Online
SB 3620 (Sen. Castro, D-Elgin)
Public notice requirements are an important and beneficial service provided to citizens. These requirements also add costs to local governments and their taxpayers, particularly for mandates to place notices in newspapers. This proposal would grant municipal governments the option to fulfill public notice mandates on a publicly available and searchable website. This is a shift to be more current with modern technology and to recognize how residents increasingly find and view public notices.Reamortization of Downstate Public Safety Pension Funds
HB 308 (Rep. West, D-Rockford)/SB 3623 (Sen. DeWitte, R-St. Charles)
The current amortization schedule for downstate police and firefighter pension funds is significantly shorter than other statewide, state-administered and Chicago-based pension systems despite downstate public safety pension funds having better funding ratios (excluding the Illinois Municipal Retirement Fund). These proposals would extend the amortization date for downstate public safety pension funds to the end of Municipal Fiscal Year (MFY) 2050 or later or decrease the required funding ratio to 80% of total actuarial liabilities in order to provide immediate financial relief to affected communities.
* The Pritzker administration pointed me to page 52 of the budget book…
A critical part of the state financial infrastructure is the operations of local governments. When possible, the State has provided additional funding mechanisms to help local governments through a myriad of ways, including one-time and permanent revenue supports to minimize the need for local property taxes. Examples of on-going support, totaling over $1.1 billion annually, enacted since Governor Pritzker took office include:
• An additional $200 million a year in sales taxes from the passage of internet sales tax language following the Wayfair decision, including the Leveling the Playing Field for Illinois Retail Act, to help ensure compliance with state tax laws on internet sales.
• Over $600 million annually in additional motor fuel taxes directed to local governments and transit districts to support needed transportation projects through the passage of Rebuild Illinois.
• Granting $1.5 billion in state transportation bond funds directly to local governments for road and highway project expenditures, saving local governments $110 million annually in debt service costs from not issuing local bonds.
• Authorization of adult-use cannabis, generating an estimated $91 million in additional revenues for local governments.
• Increased allocations through the Local Government Distributive Fund process totaling $46 million annually from business loophole closures included in Public Act 102-16.
• Increased tax rates and positions for video gaming operations is expected to generate an additional $70 million a year for local governments.
• Anticipated additional local revenues from the opening of new casinos authorized under the Rebuild Illinois plan.Illinois allocated to smaller local governments $250 million from its Coronavirus Relief Fund allocation and established the infrastructure necessary to allocate and distribute the $740 million Local Fiscal Recovery Fund payment received pursuant to ARPA. These key sources of funding will help small local governments maintain services during uncertain fiscal times.
As noted above, Public Act 101-0610 consolidated the assets of local police and fire pension funds into two statewide funds to increase investment returns and lower management costs. Helping lower the pressure on local property taxes, the consolidation is estimated to produce additional returns worth billions of dollars over the next 20 years. The higher investment returns from consolidation will translate into fiscal relief for local taxpayers supporting these pension costs.
Finally, in the last few years, local governments have seen an increase in the percentage of income and sales taxes that state government shares with towns, counties and transit districts due to removal of the distribution proration that was put into place during the budget impasse. In fiscal year 2018, these allocations totaled $1.7 billion, but are expected to total $2.5 billion in the fiscal year 2023 budget proposal – an $800 million, or 47 percent increase - in state support in the last five years.
Also, local newspapers will mobilize against the loss of revenue from official public notices, and I kinda doubt the IML will get its kick the can wish on pension funds. But, hey, you can’t get something if you don’t ask.
…Adding… I adjusted the headline to reflect the projected $1 billion cost of the group’s LGDF ask.
posted by Rich Miller
Tuesday, Feb 8, 22 @ 1:11 pm
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How about some reform for how schools are funded. Our local government is able to spend money like it’s going out of style because they get sales tax and other sources and residents don’t notice. Meanwhile the school district gets nothing from sales tax and has to rely on property taxes, which residents are reminded of twice a year. The transparency is great. Throwing schools under the bus while local government lives high on the hog, not so much. And don’t even get me started on the absurd and irresponsible uses of TIF…
Comment by The Velvet Frog Tuesday, Feb 8, 22 @ 1:28 pm
To the agenda item about posting notices on-line. Great idea, but don’t stop posting in newspapers because not everyone has internet access.
Comment by Dog Lover Tuesday, Feb 8, 22 @ 1:39 pm
If the IML wants to get the best fiscal outcome for a majority of its members, it could propose a bill to identify state revenue from cannabis, and then distribute that money to towns based on population - AND on if that town has allowed cannabis sales.
The total amount of state funds to be distributed would still be the same, but it would be divided up fewer times. Each town that has allowed adult use cannabis would be eligible to receive this state funding. Towns that have prohibited adult use cannabis sales would not be eligible for any of these funds.
Comment by TheInvisibleMan Tuesday, Feb 8, 22 @ 1:50 pm
I have noticed some questionable spending of COVID-19 money by local governments. Or, questionable spending of other funds due to having received COVID-19 aid.
Comment by Candy Dogood Tuesday, Feb 8, 22 @ 1:56 pm
===How about some reform for how schools are funded.===
Using IOC’s determination there are 852 school districts, IF Illinois were to use the Nevada / Florida model (ONE school district per county, same boundaries, different unit of government), Illinois would have 102 districts. IF the total compensation package salary, retirement, health care) of each superintendent was $100 / $200 / $300 / $400 thousand, just eliminating that position, with no other changes, would save …
$75 / $150 / $225 / $300 Million
To me that is some real reform.
Comment by Anyone Remember Tuesday, Feb 8, 22 @ 2:12 pm
Dear Municipal League:
6.06% of $4.95 = 10% of $3
Comment by SAP Tuesday, Feb 8, 22 @ 2:17 pm
“Please sir, I want some more.”
Comment by JoanP Tuesday, Feb 8, 22 @ 2:19 pm
== but don’t stop posting in newspapers because not everyone has internet access==
Great idea and huge cost saving in eliminating the publication requirement in newspapers. Lots of folks don’t get the newspaper either in print or online. Some folks don’t have internet, but Illinois has great public libraries and they all have free internet.
Comment by Donnie Elgin Tuesday, Feb 8, 22 @ 2:35 pm
I don’t blame the cities–the state reneged on LGDF formula and the public employee mandates the Democrats continually shove down their throats are a major contributor to increasing property taxes. Now the state wants to take their local sales tax away. Makes no sense
Comment by anon Tuesday, Feb 8, 22 @ 4:05 pm
” … the state reneged on LGDF formula … ”
That would be Pat Quinn and David Vaught … . Quote: “So they’ll have skin the game.”
Comment by Anyone Remember Tuesday, Feb 8, 22 @ 7:08 pm
@The Velvet Frog: Schools have plenty of highly paid employees also. Local gov’ts also has incredibly higher capital demands than schools. There’s a tight nexus between property tax and schools - the kids need to live there. The “best” nexus for sales tax is local gov’t; retailers and their visitors rely on the services of local gov’t more than other taxing jurisdictions. See: roads, police. Wanting property tax relief is fair, but ask Springfield for better distribution (for schools) or to actually consolidate the locals (park districts, townships, etc.) (for the homeowner).
@Dog Lover: It would be a great service for newspapers to report on the content of these notices to their paying readers, then, at no cost to the taxpayer. I sympathize with the plight of newspapers but forcing gov’t to waste money isn’t the answer.
@TheInvisibleMan - I agree in principle but there are too many ways for locals to “allow” cannabis establishments but effectively make it impossible. The ones that have the establishments get the sales tax revenue. That’s fair. Maybe a better argument when marijuana delivery comes through (as it inevitably will).
Comment by GC Tuesday, Feb 8, 22 @ 8:16 pm