Mayor Encourages Residents To Call State Legislators

Mayor Encourages Residents To Call State Legislators
Posted on 05/10/2011

As this session of the General Assembly draws to a close, there remain a number of lingering questions regarding the state budget. One of the key questions that impacts the Village of Orland Park is the status of the current income tax-sharing arrangement between the state and local governments, namely the Local Government Distributive Fund, or LGDF. The LGDF is one of several revenue-sharing arrangements between the state and local governments, as established by state law.

Since the creation of the state income tax many years ago, local communities have received one of every ten income tax dollars collected by the state. This was understandable because most of the tangible public services we receive come from local governments and impact everyone every day. What is important to understand is that this is not a line-item expense in the state's budget, nor is it some grant or entitlement program. It is a sharing formula in which 90% of the income taxes are sent to the state with the other 10% going to the municipalities.

This revenue-sharing compact means sharing during the good times and sharing during the bad times. Since income taxes peaked in 2008, they are down nearly 20% in the current fiscal year. That means that local governments are also sharing in that decline and have had to make adjustments to this declining revenue environment. In Orland Park, we reduced our workforce by 10% and have instituted furlough days, hiring freezes and, unfortunately, some layoffs. Can we say the same of the state?

We have adjusted to the new revenue environment, while still delivering on the many service demands our residents and businesses want, investing in infrastructure and meeting future demands. This past January, the state raised income taxes from 3% to 5%. None of this increase is being shared with local governments. Thus, mathematically, the revenue-sharing formula has declined from 10% to about 6%.

If that's not enough, the governor has floated the possibility of withholding up to 30% of municipalities' share of LGDF. That would mean more than a $1.3 million loss for the Village of Orland Park, directly impacting local services.

But here's the real kicker. If the state reduces local governments' share, by definition, it keeps more for itself. Orland Park anticipated the fiscal crisis and made the adjustments. The state received a few years of stimulus money and now, when facing reality, wants to kick the problem down to local communities.

At the same time, the state continues to send unfunded mandates to local government ---which we have to figure out how to pay for --- among them defining pension benefits, requiring that flow rates in public swimming pools be reduced and labor relations requirements --- all forcing additional expense for local governments. Every year, municipalities have to play defense on more unfunded mandates being considered by the General Assembly.

Any reduction of our revenue-sharing from LGDF, sales tax, motor fuel tax, or use taxes will place an unreasonable further strain on communities' ability to deliver local services.

This is why I am asking Orland Park residents to call your state senators and state representatives and tell them that they can't fix the state's problems on the backs of Illinois communities.

State senators for Orland Park include Emil Jones (D-14) at 773-995-7748; Ed Maloney (D-18) at 708/233-9703; Maggie Crotty (D-19) at 708/687-9696 and Christine Radogno (R-41) at 630/243-0800.

State representatives who serve Orland Park include Bob Rita (D-28) at 708/396-2822; Bill Cunningham (D-35) at 708/233-9703; Kevin McCarthy (D-37) at 708/226-1999 and Renee Kosel (R-81) at 708/479-4200.

If you could take the time to call your legislators, I'm sure they'd appreciate hearing from you.