Each of Illinois' 1,281 municipalities is required to file an annual financial report (AFR) with the state Comptroller. The Institute of Local Government Affairs and The Comptroller's Department of Local Government Affairs jointly compile and summarize these reports. This article is a brief summary of the revenue information reported for fiscal year 1993 — the last year available. The city-by-city compilation and full summary of revenues, expenditures, and debt (246 pages) may be obtained from the Institute at the cost of reproduction. The 1,280 Illinois municipalities exclusive of Chicago raised $3,371,004,154 in general revenues in FY 931. Given the 6,782,631 Illinoisans represented by these municipalities, this amounts to per capita revenues of $497. 77.2 percent of these monies were collected from local sources, while the remaining 22.8 percent were received from intergovernmental sources. Figure 1 shows the distribution of revenues across

the different specific sources. Of the 77.2 percent of revenues raised locally, the property tax is the major producer — accounting for 26.4 percent of total general revenue and 34.2 percent of that from local sources. The general sales tax is the second most important local source, constituting about 23.4 percent of general revenue. Other taxes, charges, and other non-tax sources account for the remainder of monies raised from local sources — 8.1 percent, 4.8 percent, and 14.4 percent respectively. The sales tax figure of 23.4 percent may understate the importance of consumption-based taxes. This is because the 8.1 percent shown for "other taxes" includes revenues from selective sales taxes, such as those some municipalities levy on tobacco and alcohol products. If all sales taxes (both general and selective) were summed, the result would be a figure very near that of the property tax. Clearly it is taxes on property and sales upon which municipal governments depend for own-source revenues.

REGIONS of ILLINOIS MUNICIPALITIES

Intergovernmental sources account for 22.8 percent of the general revenues. As is indicated in Figure 1, nearly nine-tenths is received from state sources, and, conversely, only a very small part is provided by the federal government. The more specific and major sources of state monies are the shared revenues from

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the motor fuel and income taxes, grants, and the personal property replacement tax,

Per capita revenue figures by region and city size are shown in Table 2. As would be expected, municipalities of the northern region (and in all classes) collect more monies per capita than do those of either the central or southern regions. This doubtless is a result of the well understood disparity in wealth between the municipalities of the Chicago suburbs and those of the more rural areas of the state. A further expected relationship in these figures is that of increasing per capita revenues with increasing city size; the larger the city, the higher the per capita revenue. Larger municipalities generally feel need of more programs and services than do those smaller in size, and the higher per capita figures reflect this disposition. Small cities and villages (<1.000) in central Illinois have the lowest figure in the state.

While the property tax is the major local source of municipal revenue, it is not uniformly important across the different regions and classes of cities. As shown in Table 3, the tax varies from 41.0 percent of general revenues in the small (<1,000) communities of the northern region to 15.3 percent in those of the central region, with per capita figures being $183 and $29 respectively. Northern area municipalities raise a considerably higher percentage of revenues from the property tax than those of the central and southern regions in all size classes, and in all size classes they raise at least twice as many dollars per capita.

TABLE 2 Per Capita	Revenues By	Region	and City	Size (dollars)
	< 1.000	1,000- 4,999	5,000 - 24.999	25.000+	All Units
Northern	447	443	537	570	545
Central	187	268	349	509	401
Southern	285	343	372	483	382
All Illinois	285	358	493	555	497

TABLE 3 Property Tax	Collection	by Region	and City	Size
	< 1,000	1,000- 4,999	5,000- 24,999	25.000+	All Units
Northern % of total Per Capita	41.0% 183	25.5% 113	30.6% 164	28.4% 162	29.2% 159
Central % of total Per Capita	15.3% 29	20.8% 56	20.6% 76	16.8% 88	18.1% 71
Southern % of total Per Capita	24.6% 70	16.6% 57	19.1% 71	16.0% 77	18.2% 68
All Illinois % of total per capita	28.7% 82	22.4% 80	28.4% 140	25.6% 142	26.4% 130

TABLE 4 FY:93 State	Aid by <1, 000	Region 1,000- 4,999	and City 5,000- 24,999	Size 24.000+
Northern	20.1%	19.4%	16.8%	17.3%	17.3%
Central	41.4%	31.7%	29.3%	24.5%	27.2%
Southern	34.1%	25.2%	24.8%	30.5%	27.2%
All Illinois	30.4%	23.9%	18.8%	19.3%	19.8%

Table 4 provides further data on the major source of intergovernmental revenue — state aid. With respect to region and size class, municipalities of the central and southern regions depend more on state aid than do northern municipalities, and the state's smallest municipalities regardless of region are generally more dependent than larger units on state assistance. The small (<1,000) municipalities of the central region are most dependent on the state, receiving 41.4 percent of general revenues from state sources. In general, there is an inverse relationship between use of and dependence on the property tax and dependence on state monies. As the property tax as a percentage of general revenue increases, state aid as a share of the total decreases.

In an effort to identify any recent trends in the structure of revenue sources, the FY 93 information was compared with that of the FY 88 AFR's. As shown in Table 5, the relationship between own-source and intergovernmental revenues changed little over this five year interval. The ratio of own-source to intergovernmental revenues was a little under 4 to 1 in 1988 as in 1993. However, within each of these categories there were considerable shifts from one to another of the different specific sources. In the "own-source" cate-

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gory, changes for services and taxes other than those on property and general sales show a considerable increase in their importance in the revenue structure. On the other hand, sales taxes and non-tax revenues (other than charges) are not quite as important now as in FY 88. The place of the property tax in the revenue structure is virtually unchanged at about 26 percent over the period, while per capita collections have increased by about 12.9 percent. In the "intergovernmental" category, the amount and relative importance of federal dollars has declined heavily — from $17 per capita and 4.0 percent of revenues to $7 per capita and 1.4 percent of revenues, while the amount and importance of state monies had increased significantly — from $73 per capita and 16.2 percent of revenues to $98 per capita and 19.8 percent of revenues,

Both own-source and intergovernmental receipts have shown a modest increase (in constant dollars) over the 5 year period. The own-source increase is $29 per capita (8.2 percent), and the intergovernmental increase is $16 per capita (16.5 percent). Total general revenue receipts are up from $451 to $496 per capita, an increase of 10.0 percent.

The shifts of the 1988-93 period are generally consistent with both national and Illinois trends of the 1980s. National data indicate that municipal governments across the country and over the last quarter-century have been making increased use of user charges, and that direct federal assistance has been in decline since the early 80s2. With respect to Illinois, a 1993 study of Illinois cities having a population of 25,000 or more shows an increase in the importance of user charges, a decline in federal assistance, and an increasing dependence on state aid3. On the other hand, findings from the AFR's are somewhat different from these other findings with respect to the property tax. The conventional understanding is that the property tax is in decline as a municipal revenue source, and this was indeed the finding of the 1993 study of Illinois' larger municipalities. However, there was no such decline in Illinois over the five years of 1988-93 when municipalities of all sizes (exclusive of Chicago) are considered. The property tax constituted about 26 percent of own-source revenues in 1988 as in 1993. There may, however, have been a decline in importance over the earlier years of the 80s.

Table 5 1988 and 1993 Municipal Revenue Sources Compared (1993 dollars) 1988 1993 % CHANGE (1988-93) Own Source Property tax % of total 25.7 26.4 +2.7% Per capita 116 131 +12.9% Sales taxes % of total 25.3 23.4 -7.5% Per capita 114 116 1.8% Other taxes % of total 6.5 8.1 +24.6% Per capita 29 40 +37.9% Charges % of total 4.1 4.9 +19.5% Per capita 19 24 +26.3% Other Non-tax % of total 16.9 14.4 -14.8% Per capita 76 72 -5.3% Subtotal % of total 78.5 77.3 -1.5% Per capita 354 383 +8.2% Intergovernmental State % of total 16.2 19.8 +22.2% Per capita 73 98 +34.2% Federal % of total 4.0 1.4 -65.0% Per capita 18 7 -61.1% Other I.G. % of total 1,3 1.6 +23.1% Per capita 6 8 +33.3% Subtotal % of total 21.5 22.8 +1.0% Per capita 97 113 +16.5% TOTAL % of total 100 100 Per capita 451 496 +10.0%

In conclusion, the 1980s was a period of considerable uncertainty and change in the revenue structure of Illinois municipalities. Municipal officials doubtless have good recollection of the economic recession of the early 1980s, the 1986 termination of the federal revenue sharing program, and the debate at decade's end over the appropriate level of state assistance. These and other developments of the 80s have resulted in a municipal revenue structure somewhat different from that of earlier years. Comparison of 1988 and 1993 figures especially shows a structure becoming more dependent on state monies and charges for services, less dependent on the federal government, and in which the place of the property tax has been relatively stable. While it is appropriate and useful to characterize Illinois municipal finance as a whole, the figures of this paper are also a reminder that municipalities of different sizes and areas have somewhat different revenue structures. Debate and public policy in municipal finance should take account of these differences. •

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