ILLINOIS NEWS NETWORK
Illinois’ new state budget already hiked income taxes for workers in the state. Now the state budget may force local sales taxes higher.
In addition to taking more of people’s paychecks with an income tax increase, the new Illinois budget takes money from local governments by changing how the state collects taxes.
The state budget takes 10 percent of the income tax dollars that are sent to cities and towns this year. Local governments will also lose two percent of their share of sales taxes collected by the state going forward.
Brad Cole, executive director at the Illinois Municipal League, said there are questions if cities and towns will eat those losses or look to local taxpayers.
“We tried to explain to the legislature that just because the General Assembly decides to cut local government, or cut state government, or cut whatever, there is only one taxpayer – the citizen,” Cole said.
Cole said he doesn’t think local governments will raise taxes. He says the political mood across the state may not allow it.
But Cole is quick to point out that many cities and towns across Illinois are dealing with large pension debts, particularly for police officers and firefighters.
“[The state budget] is just one more money grab out of an already reduced pot of gold,” Cole said. “The taxpayers are the ones that are chipping in the gold. The cities are the ones that are paying for these pensions and other expenses that the state has mandated.”
Cole said cities have asked for more local control over pension benefits and other costs in the past, but to no avail, adding that state lawmakers have “moved the goal posts” on local governments for years.
Cole said Illinois’ problem with local pensions could be the next crisis to come to a head in the state.