Welcome to 3rdWard.org, a website dedicated to communication and transparency between Des Plaines City Government and you. This website, maintained by 3rd Ward Alderman Denise Rodd, is designed to keep neighbors engaged in their community and informed about issues.

Entries in Illinois Budget Crisis (1)

Sunday
Mar272011

Help Me Fight Local Tax Increases

Legislature / Governor Consider Using Municipal Dollars to Fix State Budget


Why do you [Alderman Bogusz] care about this issue?


In mid March, I joined the Northwest Municipal Conference’s Legislative Committee in the State Capitol advocating for local government issues that affect our City’s budget.  During that trip, we asked legislators to expedite their distribution of the Local Government Distributive Fund, taxes that are raised locally, collected by the State, and returned to the local governments.  The long delay in distribution caused municipal cash flow problems and Cities like Des Plaines had to secure short-term loans to cover the gap.  We were told that “other causes came first” and “there are a lot of bills we haven’t paid.”  Delays in payment were inevitable. 

A few short weeks later, the State Legislature took it one step further.  Instead of paying late, they are floating the idea of paying less.  This State policy decision would have massive municipal implications. 


What is the Local Government Distributive Fund (LGDF)?

Often referred to as a “pass-through,” the LGDF is an automatic mechanism that collects income, gas, sales, and personal property replacement taxes from municipalities like Des Plaines.  The State then accounts for and distributes this revenue back to the municipality that raised it. 


What is the problem?

The State of Illinois is currently $13 billion in debt. 


What are some legislators proposing in the Illinois House & Senate?

Instead of treating the LGDF as a “pass-through,” some in the House and Senate want to arbitrarily reduce the local government fund’s value by $300 million in 2011 and use that money to help balance the State budget.  

IL Senate Republicans: Reality Check - A plan for reality based budgeting (March 2011), page 16

What is the impact for Des Plaines?

This dramatic move would reduce the City of Des Plaines’ tax receipts* by 30%, which represents a loss of $1,180,071 in 2011**.  The City would need to increase local property taxes by 5% to make up this revenue shortfall.


What can you do about it?

Help me educate our State Representatives and State Senators.  This fund is not State aid; it represents taxes that were raised in and should be spent in Des Plaines.  Any alteration of this “pass-through” fund will impact essential city services, public safety, economic development, and the non-profit organizations we partner with.

 

 

* The LGDF is made up of income, gas, sales, and personal property replacement taxes.
** Estimated based on projected revenues.