Village Board Urges State to Avoid Municipal Revenue Cuts

The Buffalo Grove Village Board will consider a resolution on Monday urging the Illinois General Assembly to halt consideration of a proposal that would reduce the local share of Illinois income tax receipts by 30 percent.

Entitled “A Resolution Opposing Reduction of State Collected Revenues Due Municipalities,” the action of the Board would solidify the village’s opposition to the controversial proposal. (See attached PDF.)

Under the proposal, the municipal share of income taxes would be reduced by $23.40 per capita and diverted to the state’s budget, creating an estimated $300 million decline in revenue to local governments. Locally, the proposal would reduce revenue to the village by more than $900,000.

Village President Elliott Hartstein is concerned about the impact to local taxpayers.

“The proposed cuts to funds to municipalities being talked about in Springfield can have a profound impact on our residents and citizens throughout the state," he said in a press release. "One such proposal will cut back municipal monies that are collected by the state by $300 million which is just short of a million dollar hit on our Buffalo Grove residents.”

The impact of the revenue reduction would be devastating to the village. The Village
Board would be faced with the prospect of reducing services and employees or increasing taxes to fill the budget hole. Possible service reductions could affect public safety, public works, utilities and general services.

“This means potential drastic cuts in front line service to our residents or a back door second tax increase on our residents on top of the recent income tax increase," Hartstein said. "This is unacceptable and unfair to our residents and citizens throughout the state.”

The Illinois legislature increased the personal income tax rate from 3.0 percent to 5.0 percent on Jan. 13.

The Village of Buffalo Grove has previously taken a stand on this issue by sending letters to several area legislators in opposition of the proposal. (See attached PDF.)

According to Hartstein, “Last week we sent a letter signed by myself and every member of the Board to express our grave concerns. I am placing this resolution on the Board agenda for Monday to emphasize the serious impact on our residents of this misdirected proposal.”

The village forwarded letters to State Reps. Sidney Mathias, Carol Sente, Ed Sullivan, Jr. and Sens. Terry Link, Matt Murphy and Dan Duffy on April 14.

The municipal share of the Illinois income tax was established at 10 percent of gross
receipts in 1969, as a means to sell the income tax proposal to Illinois communities. With the most recent tax increase, the state lowered the percentage of collections for
municipalities to six percent of receipts, keeping all of the incremental increase in tax revenue to shore up the state’s budget deficit. The estimated reduction in local
government’s share of revenue will put an additional $2.7 billion in the state’s coffers between 2011 and 2015, at the expense of municipalities and counties.

Hartstein noted that many communities and their residents have spoken up already concerning the proposal and he hopes many more will in the coming weeks.

“Communities throughout the state are seriously concerned about the impact on the citizens of Illinois and have been speaking out since this proposal reared its ugly head," he said.