Cities fight proposal to freeze local share of state income tax


SPRINGFIELD -- The city of Springfield could lose anywhere from $325,000 to $350,000 if Illinois lawmakers freeze local governments' share of state income tax revenue, Mayor Mike Houston said Wednesday.

Senate Democrats have proposed freezing the local governments’ portion of the income tax to help state government deal with its own budget problems.

The Illinois Municipal League said Wednesday, however, a freeze would force cities to raise taxes or fire employees.

“This is a Band-Aid solution that merely robs Peter to pay Paul and doesn’t provide for real reform,” Houston said. “If the General Assembly decides to divert that revenue, we would be forced to take drastic action.”

Houston said Springfield has already cut 46 positions from the city payroll this year.

Peoria Mayor Jim Ardis described the proposal as an assault on public safety, because most of a city’s operating dollars go to police and firefighters. Peoria would lose about $300,000 and would have to lay off three employees as a result, Ardis said.

The IML said the proposal would cost local governments $20 million to $50 million next year, according to the group.

Mayors have also criticized a proposal by House Speaker Michael Madigan, D-Chicago, to divert $1.4 billion from the corporate personal property replacement tax to the Teachers Retirement System. That bill remains in a House committee.

Houston has said the corporate personal property tax diversion would cost Springfield about $3 million a year, jeopardizing the jobs of 50 city employees and 10 employees of Lincoln Library, which receives a portion of the funds.

In order to make up for the $6.5 million Peoria would lose under Madigan’s proposal, Ardis said that city would need to raise its property taxes by 28 percent. In terms of layoffs, Ardis predicted that revenue loss would translate to 44 to 50 police officers or firefighters being laid off.

Instead of diverting funds from local governments, the Municipal League says the legislature should reform public safety pension provisions. Some of the league’s ideas include raising the retirement age for police and firefighters, as well as consolidating their 638 pension funds.

David Thomas can be reached at (217) 782-6292.