Angry mayors denounce ‘stealth’ tax, demand share of income tax revenue
By Lauren FitzPatrick Sun-Times Media May 12, 2011 5:34PM
Palos Hills Mayor Jerry Bennett speaks at a press conference on Thursday, May 12, 2011 to denounce plans by the General Assembly to create a "stealth tax" and pilfer from local budgets. | Brian Jackson~Sun-Times Media
Updated: September 29, 2011 12:35AM
Suburban mayors already cut staff, froze pay, reduced services and imposed furlough days to balance their budgets during the recession.
So why can’t the General Assembly do the same? Dozens of local leaders wondered that Thursday as they rallied against a proposal in Springfield they said would steal local tax revenue to fix the state budget mess that Springfield itself created.
“These are tough decisions and, across the state, mayors have been making them for the past three years,” Aurora Mayor Tom Weisner said. “Contrast that with the state, which has dawdled and equivocated for the past three years.
“We ask you, our legislature, don’t take police and firemen off our streets with another tax increase on our residents, a stealth tax,” he said. “It’s time for Springfield to clean up its own mess.”
Since 1969, Illinois has returned a share of the state income tax revenue it collects to municipalities. But some state officials are talking about reducing the local share — or eliminating it altogether — even while the state has raised the income tax overall by 66 percent.
Municipalities use their portion of the income tax to pay for their police and fire departments, and for other services such as snow and trash removal, the officials said.
Hampshire officials announced last week that the village’s police and other department could be severely impacted by the proposed cuts in revenue sharing.
Illinois faces a budget deficit estimated as high as $9 billion — even after the income tax increase. Gov. Pat Quinn has proposed borrowing some $8.75 billion to bridge the gap.
“We want to pay all bills owed by the state of Illinois — including payments to local governments — but we are out of resources and out of time,” Quinn spokeswoman Brie Callahan said in an emailed statement.
“Senate Republicans have proposed cutting $300 million a year from local government payments, which the governor opposes. Our proposal delays payments while we address immediate financial deadlines,” she wrote.
“We are in a position where we stand to lose hundreds of millions in federal Medicaid match if we cannot pay our share. Our hands are tied.”
Quinn instead has threatened to further delay about $1 billion in income tax payments to the local governments. The state already has delayed disbursements to towns by three to six months.