Responses from Illinois Congress to the May 13, 2011 Local Government Distributive Fund Letter from Mayor Tully

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1 Responses from Illinois Congress to the May 13, 2011 Local Government Distributive Fund Letter from Mayor Tully From: Senator Sue Rezin Sent: Monday, May 23, :37 AM I have heard from many local officials concerned about the future of state revenue sharing, known officially as the Local Government Distributive Fund (LGDF). This is a very difficult issue and I want to be open and candid about the situation. In January, when the 67% income tax increase passed, the state formula was changed in that legislation so that the LGDF would not receive any of the additional revenues from the tax hike. As I'm sure you know, I opposed that tax hike and therefore, did not vote for the formula change. Despite the massive tax increase, Illinois remains in serious financial jeopardy. That's because the Governor and those in control of the House and Senate have not addressed the spending side of the equation. As any mayor or city council member knows, no matter how high you raise taxes, you can never balance a budget unless you also control spending. In March, I joined with my fellow Senators on the Republican side to issue a stern warning: unless billions are cut from the state budget it will be impossible to keep the promise that the bulk of the tax hike would be temporary. In fact, that's an understatement. Without deep spending cuts, not only will it be impossible for the tax hike to expire, but the state will face ever-higher rounds of tax hikes. Those higher taxes will drive jobs from our state, undermine our communities and threaten the local tax base. Republican legislators offered up a menu of possible areas to look at for reductions in spending in order to roll back the income tax increase and reduce the state s deficit. And, yes, the LGDF was one of many areas to be examined. However, I want to make it very clear that we have never drawn any lines in the sand or ever suggested that cuts had to be made in a particular program or policy area, including LGDF. I am sympathetic to the argument of local officials who point out that they did not benefit from the state income tax increase and now they are concerned that they will lose revenues, even as the state collects more from taxpayers. I am frustrated because in recent weeks I have watched as the Governor sought to hold local governments hostage to his failed borrowing scheme suggesting that he would withhold LGDF payments unless he got his way on borrowing. I found the Governor's strong-arm tactics offensive and inappropriate. As a fiscal conservative and a strong believer in local control, I do have very serious concerns about reducing the LGDF formula. For one thing, I don't view it as an effective tool to reduce state spending. I am sympathetic to the argument that cutting local revenue sharing does not reduce state spending, but merely passes on more costs to local governments and ultimately to local property taxpayers. A reduction in local revenue sharing doesn't do anything to scale back state programs. In fact, I'm concerned that it could be counterproductive because it might actually free up funds that would then go to expand or sustain programs that never should have been started in the first place.

2 I cannot, at this time, guarantee what the final budget agreement will be; however I will not be supporting this piece legislation due to the negative impact on local governments. Please feel free to contact me personally if you have additional comments. Sue Rezin State Senator, 38th District From: Rep. Joe Sosnowski [mailto:repsosnowski@gmail.com] Sent: Thursday, May 19, :13 PM Dear Mayor Tully, Thank you for writing to advise me of your opposition to Governor Quinn s plan to cut local municipality funding. I certainly appreciate having received your input. Even after Illinois passed the largest tax increase in state history, we are still facing a budget deficit over $1 billion. As you already know, the Governor s proposal to completely cut the local government share of funds is an effort to borrow more money for additional spending. In the past, the governor has proposed this plan. This year, the proposal is exponentially higher. Please know that I do not support eliminating the funds that are the local government s share of tax revenues, as municipalities and counties have been doing a good job cutting unnecessary operations and keeping efficient ones. Instead, there are many areas of state government that need to be scaled back, including the excessive pension packages. The State needs to make its own cuts before asking cities and counties to make any. I currently serve on an education appropriations committee, and we are proposing spending reductions that will still provide a solid education to children in the state. This approach to making sensible reductions in spending can be replicated across state government. I look forward to hearing from you again with regard to this or any future legislative concern you may have. Joe Sosnowski 69th District 2

3 From: Rep. Karen May Sent: Thursday, May 19, :55 PM Dear Mayors, Village Presidents, City and Village Managers: Thank you for contacting me with your concerns regarding cuts to the local government distributive fund. As you know we are grappling with some of the most severe budget conditions we have seen since the Great Depression. As lawmakers search for solutions, we must be willing to put partisan differences aside and work together to craft a budget puts Illinois on the path to fiscal sustainability and helps the economy to grow. I oppose the cuts to local governments, and was pleased that the version of the budget that has been passed by the House did not include those cuts. I will continue to fight to preserve those funds as we continue to negotiate the budget with the Senate and the Governor. Karen May 58th District From: Jason Barickman [mailto:jason@jasonbarickman.org] Sent: Tuesday, May 17, :29 PM Thank you for your recent communication on behalf of Mayor Tully opposing Governor Quinn's proposal to reduce funds to the Local Government Distributive Fund. Governor Quinn has made no attempt to move this idea forward since his initial announcement. If any legislation is introduced in the Illinois House, I will certainly keep your position in mind. Your input is greatly appreciated, and I will always take the time to understand and consider your position when voting on important issues such as this one. Jason Barickman 224 North Main Street Pontiac, IL (fax) 3

4 From: Mike Tryon Sent: Tuesday, May 17, :38 PM This spring, we remain committed to passing a balanced budget, pension reforms, education reform, workman s comp reform and paying our bills, among other ideas that we have been pushing for years. Governor Quinn s threats to local governments funding to get the borrowing he incessantly pushes is not only ridiculous it is unfair. In most cases, local governments have made cuts and are weathering the economic storm and now the Governor wants to renege on the money that is owed to them this is yet another scare tactic from the Governor s office. We must make our government more efficient and effective by passing a balanced budget and reforms before we constantly lean on massive amounts of borrowing in the open market. Michael W. Tryon 64th District 1 N. Virginia Street Crystal Lake, IL MIKE (6453) FAX From: Bob Pritchard [mailto:bob@pritchardstaterep.com] Sent: Monday, May 16, :24 PM Thank you for sharing your letter regarding the local government distributive share of income taxes. I continue to be a strong proponent of local government and oppose any legislation to reduce the local government share. You are correct in saying local government has balanced their budgets and have been more responsible than has the state. The revenue sharing was part of the original arrangement to create the income tax. I believe it continues to be the best policy and additional source of revenue for local services. Clearly the state has a problem with spending that continues even with the recent tax increase. It s well past time to make the difficult choices and set priorities like Downers Grove and nearly every other community has done. The state should not shift its problems onto those that have already made the cuts and difficult decisions. Keep up the good work and I will keep up the fight here. Robert W. Pritchard Robert W. Pritchard 2600 DeKalb Avenue, Suite C Sycamore, IL Main office Fax 4

5 From: Tom Cross Sent: Monday, May 16, :52 PM Many of the members of the Illinois House are deeply concerned about the issues you have raised. Concerns cover both: (a) the proposal recently made for explicit legislation to authorize the Governor to hold back Local Government Distributive Fund payments to eligible local governments, which depend upon LGDF payments for day-to-day operating expenses, and also (b) the reported fact that the Governor s office is already holding back and withholding these payments. The Governor s office is reported to be requesting that the General Assembly grant specific statutory authority for these delayed payments Diverting or delaying LGDF payments would lead to further property tax increases being imposed on hard-pressed local taxpayers. Instead, we support the current LGDF system, and join you in urging the Governor to make up his delinquent payments to units of local government throughout Illinois. Thank you for your . Tom Cross From: Anthony DeLuca [mailto:repdeluca@sbcglobal.net] Sent: Monday, May 16, :19 PM Representative DeLuca stands in strong support of preventing further reductions to LGDF. As the former Mayor of the City of Chicago Heights, Representative DeLuca understands that municipalities provide the most essential services taxpayers receive. He just informed me that both the House and Senate passed budget measures in their respective chambers late last week that include no further reductions to the LGDF. The 2012 budget has not been finalized. Further negotiation will take place. That being said, for now, the LGDF is protected at current levels. Donna Fanning, District Manager Anthony DeLuca, - 80th District Illinois House of Representatives 722 W. Exchange Street, Suite 4 Crete, IL (708)

6 From: Bill Cunningham Sent: Monday, May 16, :40 AM Dear Mayor Tully, I am writing to let you know that I agree the Local Government Distributive Fund needs to be protected. I have signed on as co-sponsor of HB1411. If enacted, this will segregate the LGDF funds from the state's General Fund. Bill Cunningham - 35th District _ From: esthergolar@sbcglobal.net [mailto:esthergolar@sbcglobal.net] Sent: Monday, May 16, :35 AM Thank you for contacting my office to articulate your opposition to any changes to the Local Government Distributive Fund. Please rest assured that your concerns will be taken into account as action on this legislation goes forward. Esther Golar of the 6th District Ph.: (773) Fax: (773)

7 From: Pamela Althoff Sent: Monday, May 16, :19 AM Thank you for your input on the proposed reduction of the municipal share of Local Government Distributive Fund monies to your community. I share your position and believe the Governor's proposed 30% reduction is not only unreasonable, but irresponsible as well. A secondary proposal of a one year 5% reduction to the municipal share has also been introduced in an attempt to offset deep draconian cuts to human services. At this time I am unsure that this proposal has any real support or merit either. I will be monitoring its progress in both the House and Senate versions of the budget. It is my understanding if a 5% reduction were to be considered an offset provision requiring more timely payments and direct deposit would be required. Senator Pamela J. Althoff _ From: Dan Duffy [mailto:dan@senatorduffy.com] Sent: Friday, May 13, :52 PM I agree 100% and have ALWAYS voted against legislation that robs Peter to pay Paul. It is wrong, very shortsighted and not the solution. Ending our spending problem is the solution. I am currently sitting on the Senate floor voting on legislation. Thank you very much for the note. If more people in this state took an active role in our political system we would not be in the awful mess we are today. I will review and consider your comments. Have a great Friday afternoon. Dan 7