The original item was published from July 21, 2017 11:21 AM to January 1, 2019 12:20 AM
The City of Geneva's municipal services will not be impacted by Gov.
Bruce Rauner's budget proposal to reduce the local share of state income
This would have a large impact on Geneva. The Governor announced in
February during a budget address his proposal to cut the Local
Governments Distributive Fund (or LGDF) to help fix the state's
financial problems. In Geneva, that would translate to about $1 million
on an annual basis.
The local share has been an important revenue stream for municipalities
since the income tax was first instituted in Illinois in 1969. Local
communities have counted on it for 50 years to help fund key public
services like police, fire, water and sewer treatment, infrastructure
repair and construction and snow removal.
In 2015, Geneva Mayor Kevin Burns joined other municipal leaders from
region expressing concern about the governor's call to reduce the local
share of the state income tax by 50 percent. A few years later, the
issue remains a concern to the City of Geneva as leaders in Springfield
continue to consider this option as part of the ongoing state budget
Watch Mayor Burns talk in April 2018 about the challenges regarding a proposed change to the LGDF funding formula would pose on local municipalities.
The Impact On Geneva
The State Income Tax equals 12 percent of the City’s General Fund
Budget and helps pay for important services such as:
||Senior Care Program
||Prescription Drug Disposal
|Child Seat Inspections
||Vacation Watch Program
|Risk Watch Class
||Tri-Com Emergency Dispatch
|Fire Safety Education
||Fire Safety Inspections
||Ride In Kane Program
||Student Government Program
||Internal City Support Services
||Business Support & Assistance
These are but a few of the City of Geneva programs and services
supported by your income taxes. Spent locally, you can see the result
that affects your quality of life.
How You Can Help
We need your help contacting local state legislators and the Governor to
implore them to leave your tax dollars here at home where directly
affect your quality of life. Visit Protect My Town's website
for more details.
Please feel free to contact Mayor Kevin Burns at 630-742-8916 or City
Administrator Stephanie Dawkins at 630-262-8495 for more information.
State Income Tax History
Below is a history of how the state income tax has been collected and
shared with municipalities, as well as the financial impact the most
recent proposal may have on Geneva.
Deal No. 1:
In 1932, Illinois approved its first income tax – a progressive income
tax, which taxed income at ever-increasing rates. But the Illinois
Supreme Court immediately voided the progressive income tax, ruling that
an income tax in itself was unconstitutional.
Then the State of Illinois implemented a flat income tax in 1969. At
that time, there was disagreement between the State and municipalities
regarding who should implement and collect the tax. With the adoption of
the 1970 Illinois Constitution, the State agreed to collect income
taxes at the state level and distribute back to cities and villages
their “share” if they agreed not to collect the taxes at the local
level. Cities and Villages agreed to allow the State to collect the tax
from employers and then distribute a local share back to each community.
The agreement also established the tax rate as well as the amount that
the State would keep and the amount that the local governments would
receive. The State approved legislation to receive 90 percent of the
income taxes collected and cities and villages agreed to receive 10
percent based on a per capita basis (pro-rated by population).
Deal No. 2:
The State income tax rate was raised from three to five percent on
individuals in 2011 with a promise to pay down the state’s unpaid bills
and make needed pension payments. Part of the deal was making this a
temporary tax increase, with it declining on Jan. 1, 2015. When the tax
rate increased to 5 percent, the local share distributed to cities and
villages decreased to 6 percent (rather than the 10 percent they had
been receiving) in order for the State to receive all of the additional
revenue to address their budget deficit.
During the same period of time, cities and villages have cut local
budgets, reduced expenditures, laid off employees, deferred capital
investments while experiencing the costs of unfunded mandates and rising
public safety pension costs.
When the State income tax rate automatically declined on Jan. 1, 2015,
cities and village share was raised to 8 percent instead of the original
agreed upon 10 percent share.
Deal No. 3
Gov. Rauner has proposed that 50 percent of the income tax distributed
to cities and villages be cut and kept by the State to address their
financial shortfalls. This change in the law is without any discussion
with local elected officials, without understanding the structure of
local government and the difference between home rule and non-home rule
communities and their respective authorities, and without consideration
of what a 6 percent cut to our General Fund Budget means to Geneva.