Budget plan would hit cities, higher education

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Posted: Feb. 7, 2017 8:25 am

QUINCY — A proposal to balance the Illinois budget by taking away the share of income taxes that go to cities, counties and other governmental units is meeting stiff resistance even before it comes up for review by members of the House and Senate.

The Illinois Policy Institute, a conservative think tank, suggested last week that the state could close its $7.1 billion deficit without raising taxes. About half that money would come from taking away the share of state income tax that now goes to cities and freezing property taxes for five years.

Quincy Mayor Kyle Moore said that would cost the city an estimated $3.8 million a year.

“This would obviously be devastating to city services, especially since our share (of) the corporate personal property replacement tax was reduced by $400,000 last fiscal year,” Moore said.

If property taxes were frozen, it would take away one of the options that cities, townships, counties and school districts might use to help make up for the loss of other funds.

Moore believes cities should bear some of the burden of budget solutions, but “I do not believe a complete reduction in funding is the right idea,” he said.

Mike Elbe, president of John Wood Community College, said a property tax freeze also would hurt community colleges, which have lost much of their funding during the 20 months the state has been without a budget. Community colleges have the authority to levy property taxes.

“We’ve worked hard to be conservative stewards of tax dollars … and decreased operating costs by $1.5 million in the last few years. This practice has allowed us to only minimally increase the tax rate when absolutely necessary,” Elbe said.

“If you completely freeze property taxes and combine that with existing lack of state support, it will significantly limit the college’s ability to fund the array of workforce and college transfer programs that currently serve our students and district. The remaining source of funding is student tuition, which is capped at certain levels to maintain accessibility to high-quality education.”

The Illinois Policy Institute also has recommended that the state save $1.6 billion a year by changing its pension systems, save a little more than $1 billion annually by reducing the number of state workers, and get a new contract that cuts wages and require workers to pay more for health care. About 600,000 adults who do not have children also would be eliminated from Medicaid under the plan, saving about $415 million a year.

Institute CEO John Tillman also suggested cutting $500 million a year from Illinois public universities.

Matt Bierman, interim vice president of administrative services at Western Illinois University in Macomb, said the school already has faced a huge funding shortfall because of the budget battle. An audit of WIU released last week shows that the school has been forced to cut employment and find other ways to eliminate costs.

“We were shorted by about $30 million in 2016 over what we got in 2015. So last year we spent about that much from our reserves,” Bierman said.

State Rep. Randy Frese, R-Paloma, said people should not be too concerned yet about any single proposal.

“Anytime something like this gets thrown out there, it becomes an immediate target,” Frese said.

He said proposals are changing day by day. Members of the Illinois Senate have been discussing a number of bills to end the budget gridlock, but lots of different ideas have been considered.

Frese does not want to see all the pressure put on cities.

“The hard, real fact is the cities have felt this going back to 2008. That’s when they started seeing declines in revenue the state would pass on to them,” Frese said.

“They’ve tightened their belt, but the state’s not getting any healthier.”

State Sen. Jil Tracy, R-Quincy, was attending a Senate retreat Monday. She said all options need careful consideration but there are many proposals under review.

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Budget plan would hit cities, higher education

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