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Legislature spares local governments from further revenue cut

Local government leaders statewide probably are breathing easier after the Illinois  Legislature last week did not follow through on a proposed cut to the Local Government Distributive Fund.

The budget passed Monday, May 31, leaves intact the 6.06% rate of LGDF revenue shared with local governments.

Homewood, Flossmoor and Hazel Crest officials had joined a lobbying effort in recent weeks aimed at preventing the cut to a funding mechanism that municipalities depend on.

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LGDF was established in 1969 to share state income taxes with local governments in lieu of local income taxes. Initially, municipalities were to be given 10% of total income tax collections on a per capita basis.

In recent years, the LGDF rate was cut to 6.06% of the state’s total income tax collections. A proposal this year would have trimmed an additional 10%, which critics of the move said would make local governments even more reliant on property taxes.

Some communities would have been more vulnerable to the cut than others. Homewood, with robust sales tax revenue, might have weathered the cut better than some. Still, Mayor Richard Hofeld said there are projects that wouldn’t be possible if LGDF revenue was cut.

The Homewood Board of Trustees approved a resolution at its May 25 meeting urging lawmakers to not only refrain from further cuts but to restore the LGDF rate to its original 10%. Homewood received nearly $2 million from the state in each of the past two years, so the proposed cut would have cost the village about $200,000.

Flossmoor Mayor Michelle Nelson said the cuts would have cost the village about $100,000, and that would have “a direct impact on police, fire and public works services.”

“In Flossmoor, the loss of $100,000 can be thought of as nearly three police squads, nearly a year’s worth of sidewalk replacement or parkway tree trimming and maintenance, or the equivalent of one full-time police or fire personnel,” she said.

Nelson warned, before the vote, that “If this proposed reduction passes, Flossmoor does not have an alternative revenue source to raise all of this lost revenue.”

Cook County Board President Toni Preckwinkle and a group of suburban mayors representing 275 Chicago-area municipalities held a news conference on Wednesday, May 19, to argue against the proposed cut.

Hazel Crest Village President Vernard Alsberry Jr., past president of the South Suburban Mayors and Managers Association, which represents Homewood and Flossmoor, was among the speakers. 

“Municipalities depend on LGDF dollars to lessen the burden on homeowners who pay property taxes, while keeping municipalities operating and providing basic services,” Alsberry said. “Illinoisans pay among the highest property taxes in the nation and cannot afford further increases during these challenging and uncertain times.”

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