DECATUR — City governments across Illinois, including Decatur, won't get the relief they were hoping for in Republican Gov. Bruce Rauner's 2019 budget proposal introduced Wednesday, which calls for keeping local shares of state income tax revenue at lower levels for another year.
"If you a have a one-time hit, you weather that storm, but if this is an ongoing thing, it's not going to work out very well," Decatur Mayor Julie Moore Wolfe said.
The governor in an address in front of the General Assembly said he could cut taxes by $1 billion if lawmakers approved changes to the pension system and state worker health insurance. Also part of the plan is addressing funding for municipalities.
The reason: When lawmakers finally passed a budget last summer after two years of gridlock, cities across the state took a hit. The budget cut their share of state income tax by 10 percent, which amounted to about $1 million in revenue for Decatur. It's a major component of Decatur's current $3.2 million deficit.
State law calls for returning those shares to prior levels next year. City officials had hoped that provision would limit bigger deficit troubles.
Instead, Rauner's recommended budget proposal would create a similar-sized loss to city revenue in 2019.
"This potentially moves us closer to the strong possibility of the need to make substantial, difficult reductions in our budget," City Manager Tim Gleason said. "We also know that there is still a long way to go in terms of work to be done by the General Assembly and before a final decision is made.”
Cities across Illinois are facing similar financial troubles, in part because of the state law change.
Local shares of state income taxes are "the financial foundation that most communities build from to deal with tough economic times like we’re experiencing now across the state," said Brad Cole, executive director of the Illinois Municipal League, an statewide advocacy group for municipal governments.
Lawmakers approved the new budget over Rauner's veto in July. When asked why the governor had decided to include the provision in his proposal for next year, Rauner spokeswoman Rachel Bold on Wednesday said: "Last year’s budget, enacted over Gov. Rauner’s veto put this policy in place — our budget extends it another year."
"From our standpoint, this was a one-time revenue idea for a reason," said John Patterson, spokesman for Senate President John Cullerton, D-Chicago. "We look forward to hearing the governor’s argument for extending a policy he vetoed last year, and presume he would be bringing Republican lawmakers’ support to back it up."
If any local governments had asked whether they could rely on the previous income tax shares, state Sen. Dale Righter, R-Mattoon, said he would have told them it wasn't likely to happen.
"There is going to be continued pain and sacrifice if we're going to get back on our feet and get the billing cycle down to normal," Righter said. "This is going to go on for another two or three years — you've got to be honest with people. And they don't want another (state income) tax increase either."
On the local level, Decatur city council members seem to have no appetite for tax increases either at this point.
"I think the people want us to work with the money that we've got, and work within that limitation," City Councilman Pat McDaniel said Wednesday.
City staff have floated a number of preliminary ideas and options on how to make up for lost revenue, including cuts to funding for local organizations, and reworking building deals related to police headquarters and city offices.
It's unclear how viable restructuring the city's building deals are at this point, and how many of them would need to be successful to avoid painful staff layoffs or cuts to city services.
"Something's gotta give," City Councilman Bill Faber said. "If we don't have those sources (of state tax revenue), we're going to have to make cuts, which is going to affect the health and welfare of our community. If there's no money there's no service."
"I think we need to plan for the worst at this moment," City Councilwoman Dana Ray said.
Gleason has pledged to give a public update every month at city council meetings on where to find savings.
"We're monitoring this month-by-month, and staff is looking at this every day," Moore Wolfe said. "We will do what we have to do, and there will be cuts somewhere. No one wants to cut personnel or slow down services, or cut services, but we just can't have everything."