Illinois budget crisis could become local crisis, too

The solution to the state budget crisis could determine whether cities, counties and townships ever see their shares of gasoline and gambling taxes again.

The State of Illinois since July has held onto $148 million in tax revenues from gasoline sales, casino gambling and video gaming that normally go to local government, according to the Illinois Municipal League. The money is tied up in the state budget crisis.

But local officials have questioned whether the state plans to keep the money to pay its own bills.

“That’s what we’re telling them we think is going to happen,” said Brad Cole, executive director of the Illinois Municipal League. “We think that’s a likely maneuver that the state will take.”

Cole said he suspects that state officials see money that now goes to municipalities as a partial solution to its budget problems.

“They have a hole to fill. It’s easy to fill with someone else’s money,” he said.

The hole is about $6 billion, said state Sen. Sue Rezin, R-Morris.

“Everyone at the table has to figure out how to fill the $6 billion hole,” Rezin said.

The possibility of losing gasoline and gambling taxes is a stark example of how the state’s budget crisis could quickly become a budget crisis for local governments.

“It would be a severe hit to us,” City Manager Jim Hock said. “We get $18 million [a year] from just our casinos.”

In Joliet, casino taxes over the years have paid for countless road projects, as well as Silver Cross Field, the Joliet Area Historical Museum, and the Joliet Public Library Black Road branch.

Since the recession, casino taxes have been used to bolster the budget.

Hock said Joliet is joining Aurora and Elgin – other towns with casinos – in making a plea to Gov. Bruce Rauner to release the local share of casino taxes.

Meanwhile, Democrats have initiated House Bill 4305, legislation that would appropriate the local share Motor Fuel Tax funds, gambling taxes, and 9-1-1 revenue collected by the state .

State Rep. Natalie Manley, D-Joliet, a chief co-sponsor of the legislation, said the bill in part is a response to concerns that the state wants to keep the money.

“That’s why we brought this bill,” Manley said. “There’s a lot of rumors.”

Manley said no one in state government has told her there is a plan to keep the local share of money. But, she said the fears “are warranted.”

“We’re in a budget crisis, and I think everyone fears that the state is going to latch onto their money,” Manley said.

Rauner opposes HB 4305.

“HB 4305 is another attempt by the Democratic majority to piecemeal together a budget that will force a tax hike on hard-working families without any meaningful reforms,” Rauner spokeswoman Catherine Kelly said in an emailed statement.

The Rauner administration instead is formulating an option to lend municipalities money that would be paid back when casino and gas taxes are available again.

State Rep. Larry Walsh Jr., D-Elwood, acknowledges that the state does not have the authority to release the money to local governments without an appropriation ordinance in place. But he said HB 4305 is aimed at providing that authority.

He also said state officials have the power to keep the money but that would be “a tough pill to swallow.”

“We have to pass a bill to do that,” he added. “I have not heard of that being proposed.”