The state budget stalemate is starting to have a greater financial impact on municipalities, as the state continues to withhold towns’ share of state revenue, such as motor fuel tax income.
Since July, Palos Heights has not received a dime of its approximately $25,000 monthly motor fuel tax distribution.
Following the lead of the Southwest Conference of Mayors, the City Council Tuesday night approved a resolution calling upon Gov. Bruce Rauner and the legislature to immediately release all non-general fund revenue that’s owed to local governments.
Besides the motor fuel tax money, that includes 911 fee income and towns’ share of the revenue from casinos and video gambling. None of those funds are traditionally considered part of the state budget.
All member towns of the Southwest Conference are being asked to pass the resolution. Palos Heights Mayor Bob Straz said the state has held back an estimated $150 million from municipalities since July.
“We hope that we are making a statement that beyond everything else, they (Rauner and legislators) are hurting individuals and municipalities,” Straz said. “We are lucky that through sound fiscal management we do have reserves, but there are some towns that are not in the same circumstances.”
The state places a 19-cent tax on every gallon of gasoline to help pay for road and bridge projects. The Illinois Department of Transportation receives 45.6 percent of that money, along with a 2.5 percent surcharge on diesel fuel.
Beyond that, the revenue is distributed municipalities throughout Illinois, based on population.
Straz said municipal officials are getting more concerned about the financial squeeze being applied to them by the state and are worried that the state will also begin withholding money from the Local Government Distribution Fund. That’s 8 percent of the money from the state corporate and personal income taxes that is sent to towns.
Straz said the message at last week’s meeting of the Southwest Conference of Mayors was that the impasse over the state budget will not be resolved until January at the earliest and possibly not until April.
Several Southland mayor recently ridiculed Rauner’s proposal last month to offer low-interest state loans to towns that are hurting financially because of the state keeping the local share of tax and fee revenue since July. They questioned why towns should pay interest to get money that’s legally due them and not part of the state budget.
Rauner’s office announced the plan after a House committee approved a bill to release the millions in local funds that have been held back. That bill is pending in the House.
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Patricia Trebe is a freelance reporter.