On Monday, about 50 mayors, village leaders and other municipal leaders representing about 4.5 million suburban Chicago residents gathered outside the Quad at Elmhurst College to ask the Illinois General Assembly to raise local government distribution funds. , called for the reversal of a myriad of unfunded obligations. The past 10 years have passed.
The Local Government Distribution Fund (LGDF) is a partnership between the State of Illinois and its local governments created in 1969 to distribute a portion of state income taxes. Between 1993 and 2011, 10% of the total income tax collected was earmarked for the LGDF, but by 2017, that percentage had been reduced to 6.06%.
“Local leaders have known for decades that they can rely on LGDF as a predictable and sustainable source of funding even as other revenues fluctuate from month to month,” said Palos Hills Mayor Jerry Bennett. ''
Bennett said the state cut LGDF's revenue because of the instability caused by the 2008 financial crisis and promised the cuts would be temporary.
Income taxes account for nearly 30% of the projected total revenue in the 2024 state budget, or about $33 billion. Last year, the state raised the LGDF income tax rate to 6.47%, so local governments are expected to split their personal and corporate income taxes into about $2.13 billion.
In 2025, Illinois is expected to bring in $109.7 billion in appropriated funds, with income taxes once again accounting for nearly 30% of total revenue. If raised to 10%, the LGDF would receive $3.29 billion, $1 billion more than the current tax rate.
“My community of Hazel Crest has lost more than $10 million in LGDF since 2011, while at the same time facing more than 1,600 unfunded mandates since I was elected in 2013. ” Hazel Crest Mayor Bernard Alsbury said Monday.
As of March, the 103rd Illinois General Assembly has no new funding available, according to a March 19 report from the Illinois League of Municipalities (IML), a government sector lobbying group representing local government leaders. It said 155 bills have been introduced to create mandates.
“Unfunded mandates enacted into law cumulatively increase operating costs for municipalities,” Brad Cole, CEO of the Illinois League of Cities and Municipalities, said in the report. “As legislators of all political parties continue to campaign to reduce property tax costs across the state, the cost of unfunded mandates is a direct and significant contributor to increasing Illinois’ property tax burden. You have to recognize that there is.”
Alsbury said to compensate for the decrease in revenue from the LGDF and the increased burden of unfunded mandates, local governments are filling the gap by increasing property tax rates.
The median Cook County resident tax bill in 2023 increased by 15.7%, “the largest percentage increase in 30 years,” according to the county Treasurer's Office.
“Each of us here, and every other citizen of Illinois, depends on the critical services provided by our local governments,” Wheaton Mayor Phil Suess said Monday. “We are here this morning to reach out to our partners in the General Assembly and urge them to work with us to prioritize continued investment in our communities.”
