Chicago Revenue Would Dip Under Gov. Quinn's Budget Plan

The governor's proposed budget would cut Chicago's share of money from the state income tax, a move one group says could cost the city as much as $31 million.
March 8, 2013

By Ray Long and Hal Dardick

Gov. Pat Quinn's budget plan would cut Chicago's share of money from the state income tax, a move one group says could cost Mayor Rahm Emanuel's administration as much as $31 million.

The mayor, however, left little doubt Thursday that the governor's proposal is far from the final world at the Capitol.

"The thing I do know about budgets from my time here as well as Washington, regardless of the environment, what you propose and what finishes is not the same thing," Emanuel said at a small business regulations event at City Hall.

The state has been sharing a small portion of the income tax since it was enacted more than 40 years ago. Currently, Illinois cities, towns and villages collect 6 percent of income tax proceeds.

But Quinn wants to keep more for the cash-strapped state treasury by freezing what cities get at 2012 levels. The Illinois Municipal League says that amounts to giving cities 5.7 percent. The hit would be at least $68 million statewide, according to the Quinn administration.

Lobbyists for cities and towns already are organizing opposition because they don't want to lose money in the new state budget year that begins July 1, said Larry Frang, the municipal league's executive director.

"Every time this type of proposal surfaces, it's like a ... body blow," Frang said.

Chicago would get about $31 million less than it anticipated in next year's budget -- $230 million instead of $261 million, Frang said. The city stands to collect about $245 million in the current budget.

Quinn budget aide Abdon Pallasch said the impact on Chicago would be closer to $14 million rather than $31 million. By that accounting, Chicago would not see a reduction, Pallasch argued.

"It's more of a 'hold the line' and a midway point to what many lawmakers are pushing," Pallasch said in an email.

If the state can keep more of the income tax, it might "avoid further cuts in general state aid to schools in Chicago and around the state or cuts in services for the elderly, the people with disabilities and mental illnesses, and our most vulnerable that the state cares for in Chicago and around the state," Pallasch said.

Frang said Quinn's budget office is lowballing how much income tax revenues will go up over the next few months.

The Quinn administration wants a review of all automatic transfers that currently "increase every year and sail through the state treasury on autopilot without any legislative review," Pallasch said.

The Quinn plan, only vaguely referenced in his budget speech and in presentations by his senior staff, means cities would lose a little less than $11.20 per resident to divert to state services while cities battle their own budget woes, Frang said.

(c)2013 the Chicago Tribune


More from Finance