State Budget Includes Full Tax Payments to Municipalities

According to the state budget passed through the legislature Tuesday, municipalities across Illinois will get their full share of local government distributive funds over the next year.

Gov. Pat Quinn, who has not yet signed the $33.2 billion Fiscal Year 2012 budget, had floated the idea of the state retaining $100 million in tax revenue normally distributed to municipalities, so the state could pay its own bills. This plan, he said, would be enacted if lawmakers did not allow him to borrow billions to prop up the state’s coffers.

The proposal was met with disbelief and hostility at the local level, with organizations like theMetropolitan Mayors Caucus and the MetroWest Council of Government organizing protests in Chicago and Springfield.

Mark Horton, Oswego's director of finance, said Quinn's proposal would have meant the village would have been short about $700,000 in its current budget. 

"We would have been in a world of hurt," he said. "That's a lot of money for us."

Horton said the state also is currently four months behind in its payments to the village, amounting to about $580,000. Word from Springfield, Horton said, was that the state also was not going to pay municipalities what they are due. That would have left a total about $1.3 million shortfall in the village budget, which would have forced some serious cutbacks.

"That would have been painful," Horton said.

The problem of late payments from the state is not expected to go away under this new budget. And in fact, it may get worse.

According to this Illinois Statehouse News story, the 2012 budget (which takes effect July 1) was balanced by delaying the payment of billions in unpaid bills. Whatever the speed of the payments, the Illinois Municipal League is calling it a win.

“This is a major victory for cities and counties who fought diligently to preserve their portion of the income tax,” the League wrote in a post to their website Wednesday. “The IML staff thank all of you wholeheartedly for your perseverance to send the message to legislators and the governor.”