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 Local Government Distributive Fund (4)


Action Alert: Help Me Fight Local Tax Increases & Protect Our Revenue from the State

The Illinois House of Representatives is poised to take final action on Senate Bill 622 as early as next week.

If passed, SB622 would divert $6.6 million from the Local Government Tax Fund (this fund has been called a number of things, including the Local Government Distributative Fund or LGDF) to cover a shortfall in the Illinois State Medical Disciplinary Fund.  In other words, instead of allowing local sales tax revenue to go back to the cities that generate it, the State of Illinois is diverting funds to fix their own budget issues. 

This bill represents a dangerous and constant threat to local government revenue. (see the botom of this post for some history on the issue)  The City of Des Plaines generates sales tax revenue and it should be spent on streets, sewers, and sidewalks right here in Des Plaines.  The State should not use our local revenue to mend their budget. 

I have continued to fight to protect local government revenue from the State.  The alternative is just not acceptable - we will not raise local taxes to pay for the State's budget problems.   

This issue continues to surface in Springfield.  Here's what I had to say in 2011:


Additional background from the 3rdWard.org archives:

Help Me Fight Local Tax Increases - March 27th, 2011

Local Taxes Update, It's a Must Read - May 1, 2011


Local Taxes Update, It's a Must Read

The Governor has put forth a new proposal that will throw yet another wrench into the local government distributive fund battle being waged in Springfield.  Before reading the Chicago Trib article, you'll want to read my post from March 27 and you might even want to watch this clip for context. Here's the update:

1. The State is $13 billion in debt

2. Local municipalities want the State to turn over local tax revenue that we're owed

3. The Governor wants to borrow to pay the State's bills

4. Some in the Legislature don't want to let him borrow the money

5. The Governor is threatening to withold local revenues from municipalities until the Legislature allows the Governor to borrow

Budget Dir. David Vaught (Credit: Tribune)

The Governor's budget director is quoted saying that local elected leaders should "come help us [the Governor] get the debt restructured, and then you [municipalities] would get paid. That's the message to them. It's not, it's not a hostile message. … We have a cash crunch here, and we need your [the municipalities] help getting out of it." 

You have to read it to believe it.  Read Quinn wants to withold cities' money as pressure to borrow billions (Chicago Trubune - 04/28/11) 


Video: Local Gov. Distributive Fund


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.