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Fun with numbers: When a claimed 40 percent cut is actually a 43 percent increase

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* The Tribune editorial board likes the idea of eliminating the grocery tax, but hates the idea of cutting funding for local governments

And when you look at the fiscal problems present in suburbs like Evanston, which has little or no money to pay for replacements to aging city facilities, you can understand why the municipalities are trying to argue that the small individual savings are insignificant compared with their own cumulative losses.

You could, of course, argue that about any potential tax cut. But officials like Rockford Mayor Tom McNamara already were complaining about the reductions in the so-called Local Government Distributive Fund. “Since 2011,” McNamara wrote recently in the Rockford Register-Star, “the state has unilaterally decreased the local share of LGDF by almost 40%, so that in State Fiscal Year 2023, the local government share is only 6.16% of individual income tax collections and 6.845% of corporate income tax collections.”

The state did indeed reduce LGDF from its longtime percentage of 10 percent during the 2011 tax hike debate, at least partly because so many mayors were adamantly against that tax hike.

* I asked the governor’s office for a response…

In FY2010, Rockford received $11,392,699 in LGDF. In FY2023, Rockford received $23,167,389 in LGDF. Just FYI, Rockford also received $229,053 in FY23 as its portion of the monies sent to locals through the Cannabis Regulation Fund.

And you did not ask, but I thought I would include statewide totals for LGDF FY10 vs FY23: In FY10, $985,358,544 was distributed to locals through LGDF. In FY23 $1,996,786,951 was distributed to locals through LGDF.

As you can see, LGDF distributions to Rockford and statewide more than doubled from FY10 to FY23.

Adjusted for inflation, the statewide FY10 LGDF would’ve been equal to $1.39 billion at the end of FY23, compared to the $2 billion they actually received from the state last fiscal year.

So, LGDF disbursements to locals weren’t cut by 40 percent, as the Tribune’s editorial more than implies. Instead, municipalities have received a 43 percent increase in inflation-adjusted state LGDF dollars since their percentage was cut.

Also, restoring LGDF to 10 percent would cost the state as much as $850 million and equal a 100.5 percent inflation adjusted increase over what locals received in 2010.

posted by Rich Miller
Friday, Mar 8, 24 @ 1:13 pm

Comments

  1. If you want to make it up the ranks at Alden Global Capital, you better come equipped with an open contempt for math.

    Comment by Roadrager Friday, Mar 8, 24 @ 1:35 pm

  2. Math is hard. Math is also something not everyone is willing to understand or take the time to think about.

    Its so much easier to just say “unfair” and be done with it.

    Pretty easy to get people to believe it too.

    Comment by Cool Papa Bell Friday, Mar 8, 24 @ 1:40 pm

  3. Evanston has its problems that have nothing to do with losing the grocery tax.
    Their residents want the Government involved in everything. When you are expected to do everything you eventually can’t afford to do anything. Why do you think Biss decided to take the stadium deal?

    Comment by Frida's boss Friday, Mar 8, 24 @ 1:46 pm

  4. Might be a typo here. In the sentence ear the end beginning with “Adjusted for inflation…” I think you mean “at the end of FY23″ instead “end of FY13″

    Comment by Joe Bloe Friday, Mar 8, 24 @ 2:08 pm

  5. Have fun with math all you want. The issue is the Gov is proposing to take $350-$400M from local governments that they are receiving today. Regardless of what happened up to 2/21/24, that’s a revenue cut. If approved, there will be consequences.

    Comment by IML lover Friday, Mar 8, 24 @ 3:06 pm

  6. @IML Lover- they’ll figure it out. If the IML wants to really stop this they should let CTU know that the money lost for Chicago will have to be covered by the Bring Home Chicago tax. CTU wants $20 million of that money for - administrative services and responsibilities affiliated with homeless children in school utilizing more in-school services,

    Comment by Frida's boss Friday, Mar 8, 24 @ 3:14 pm

  7. ==The issue is the Gov is proposing to take $350-$400M from local governments that they are receiving today. Regardless of what happened up to 2/21/24, that’s a revenue cut. If approved, there will be consequences.==

    And nothing prevents the locals from enacting their own 1% grocery tax to replace that revenue. Except, of course, the political will to enact and justify a tax of their own, instead of using the excuse of “this tax-crazy state” while happily pocketing the revenues.

    Comment by Roadrager Friday, Mar 8, 24 @ 3:18 pm

  8. The issue here isn’t with the math, it’s with the sleight of hand involved in what is being measured. The reason why the Tribune Board can claim tax revenue distribution has gone down is because the local government’s “share” has gone down. While that may be true, because overall revenue subject to the tax has gone up, the decline in share hasn’t mattered.

    It’s ironic, since the Tribune editorial board is usually a big fan of a “rising tide lifts all boats” type of argument when it comes to tax cuts.

    Comment by Bond Guy Friday, Mar 8, 24 @ 3:25 pm

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