City could face $1 million loss

By Tyler Davis, @TDavis_DE

Carbondale citizens may be aware of Republican Gov. Bruce Rauner’s cuts to state funding for SIU, but they may not know the city itself could lose more than $1 million.

City Manager Kevin Baity said if Rauner’s proposed budget passes, Carbondale could lose $1.2 to $1.3 million from the Local Government Distributive Fund, which disbursed about $1.2 billion last year statewide. The fund gives counties, cities and villages state money—including revenue from the state income tax—and divides it up among municipalities on a per-capita basis.

For Carbondale though, Baity said in the past few years, the fund has given the city’s general revenue about $99 per citizen but that number varies from year-to-year. Rauner’s proposed 50 percent cut of LGDF monies to municipalities would drop that amount to $45.50 per citizen—a cut that Baity said the city cannot afford while dealing with a budget deficit already at nearly $300,000.

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“If they pulled 50 percent from us, then the deficit that we had dropped down to under $300,000 would go back up to 1.5, 1.6 [million dollars],” Baity said. 

Joe McCoy, legislative director of the Illinois Municipal League, said the money taken from municipalities would be used to help fix the state’s budget issues. The league represents Illinois municipalities before the General Assembly and helps train local officials.

McCoy said no governor has proposed such a redistribution of the LGDF, and his organization will fight Rauner’s proposal because that’s what the towns, cities and counties it represents want.

“We’re not going to agree to any reduction,” he said. “We’re hopeful that we can work with the administration and the General Assembly to find other solutions that wouldn’t result in lost revenues to municipalities.”

McCoy said the league’s members do not want to lose any money from the fund because services such as the police department and fire department could be cut.

SIU students would feel the affects of the cut because infrastructure would take a hit as well, McCoy said.

Baity agreed. He said students could be forced to walk on rugged sidewalks, have less frequent home rental inspections and have diminished police protection if Rauner’s proposal passes.

If the fund money is taken from Carbondale, the City Council would be forced to implement proposed food and beverage and packaged liquor taxes as well as raise the general sales tax for the city, Baity said.

“[The taxes] will have to be an option or significant reduction in services or cuts in staff,” he said. “Any time you cut 1.2, 1.3 million out of $25 million general budget, like the city of Carbondale has, [cuts in essential services] are an option.”

Another issue is the timing. The state legislature does not have to approve a budget until July, when the new fiscal year starts.

However, Carbondale’s budget will be approved at the April 28 City Council meeting, meaning the council will have some guesswork to do when deciding what to cut, how much to cut and how to increase revenue.

Not to mention, some taxes need a three-month window before being put into effect. Baity said the council may have to account for this and choose to increase taxes before the state budget is even approved.

He offered another possibility for the council as well. 

“If we do not anticipate the cut and the cut happens, then you have to look at other items that you can either cut service or cut costs or increase revenues,” Baity said. “If you do it on a local basis, and it doesn’t require state collection, then you can have [certain taxes] in place in about 60 to 75 days.” 

Rauner’s Feb. 18 proposal still needs to clear the Illinois General Assembly, which is a Democratic supermajority. Baity said he predicts the state budget will not be resolved until the spring or later.

Baity said he does not foresee Rauner’s budget passing, as other cities, such as Chicago, would experience massive revenue slashes.

The Daily Egyptian asked the mayoral candidates about what they would do if the city lost more than $1 million in state funding.

City Councilwoman Jane Adams said she hopes the proposal is just a starting point for budget talks. She said it does not solve Illinois’ monetary issues but redistributes where the problem lies.

“It would be pushing the state’s debt problems down to the local level in a way that simply is insupportable,” she said.

Adams said one solution is creating a stronger local economy so Carbondale is not as reliant on state and federal money. She said attracting more students to SIU, taking advantage of enhanced internet speed and making the area more pleasing for international students all feed into that goal.

Mayoral candidate Mike Henry, owner of Henry Printing Inc., cautioned against panic in reaction to the potential loss. He said the budget approval is still in the beginning stages.

“There’s a long ways to go for negotiations for the budget,” he said. “It’s something we need to be aware of to find out where it’s going, and it’s something we don’t want to happen to Carbondale, but I think it’s too early to get into it.” 

Henry said he does not have any specific plans to overcome the issue as of now. 

Tyler Davis can be reached at [email protected]

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