CARBONDALE — During his 2018 budget address, Gov. Bruce Rauner announced his proposal would cut the municipalities’ Local Government Distributive Fund, or LGDF, by 10 percent.
LGDF distributes shares of state personal and corporate income taxes to local governments not based on need, but on share of the state population. In the budget passed by the state this past July, there was a “one-time” reduction in the LGDF for Fiscal Year 2018.
Elected officials in Southern Illinois, as well as those tasked with balancing budgets, are forced once again to find — in some cases — hundreds of thousands of dollars if the governor’s proposal is approved.
In Carbondale, City Manager Gary Williams said the city is looking at a possible $328,000 loss in revenue for Fiscal Year 2019. In FY18, the city saw close to a $330,000 cut from the LGDF.
Williams said the city has not included an allowance to offset the loss of revenue in its budget it is preparing for the next fiscal year. He said the city is looking at leaving positions unfilled and deferring more costs for equipment and operational expenses.
“It will be difficult to absorb another reduction of this amount without cutting personnel, services, or running a deficit budget,” he said.
Mayor Mike Henry said the City Council already asked its city staff to cut 10 percent out of the budget before the news of the proposed reduction.
“We were concerned about this happening and we will have to go back and find more cuts,” he said. “It is going to be extremely difficult.”
Recent declining sales tax numbers compared to past years and a continual declining student population at Southern Illinois University Carbondale are hurting the city as usual drivers of the economy. Henry said the city’s sales tax has started to stabilize, but he’s not sure where the additional cuts are going to come from.
“I’m not prepared to raise taxes now," he said. "Any of them.”
Henry said there are community improvement projects the city will most likely postpone, but it’s going to be up to the city manager and department heads to find the savings.
In Marion, Mayor Anthony Rinella said the proposal reduction could cost the city about $160,000 to $170,000.
“This is just shifting the burden of taxation from the state level to the local level,” he said. “Marion runs almost exclusively on sales tax revenue, and to continue to have your money taken away from you, is at the very least unsettling.”
Rinella said that money is substantial to small cities, and the current state mindset is frustrating.
“While the city does not anticipate any tax hikes at the present, the continued attitude at the state level towards local government must end,” he said.
It’s not just the larger cities in Southern Illinois facing substantial setbacks. Towns like Du Quoin and Murphysboro are also seeing tens of thousands of dollars potentially wiped from their budgets.
Andrew Croessman, Du Quoin's city clerk, said a 10 percent cut would result in a decrease of $54,676. He said the proposal would move the city from the black to the red.
“Since 2015, we have managed to absorb cuts and the state not paying its bills through finding savings throughout the city,” he said. “There is obviously a limit to this behavior, then, cuts to services and/or tax increases become a reality.”
Murphysboro could see a reduction of about $114,000.
Mayor Will Stephens said since there are limited tools a municipality can do — raise taxes or cut expenses — adding that the first thing he wants to do is look at expenses.
“You don’t want to look at cutting employees,” he said. “That is typically where you want to look last.”
Most likely, he said the city will start with road, street and sewer maintenance. Additionally, the city will probably have to forego a vehicle purchase or some other big ticket item, but he wouldn’t think about raising taxes at this point.
“Every year we see the continuation of poor fiscal policy in the state of Illinois,” Stephens said. “It has been coming for a long, long time.”
He said this isn’t just an attempt to reduce money to municipal government, but money to all corners of the state, and it probably isn’t going to stop any time soon.
“This is going to continue to happen and nobody should be surprised by it,” he said.