MUNICIPAL BUDGETS —
INCOME TAX SURCHARGE THE UPCOMING MONTHS

By THOMAS G. FITZSIMMONS, Executive Director

The final considerations and decisions have been made on next year's municipal budget. The process is similar in nature for all municipalities. The existing revenues only allow for so many demands, necessities, improvements, increased labor cost and material cost to be met. Since municipal budgets in Illinois must be balanced the process requires all parties to reach an accord. The budget process and fiscal balancing for the past two years has been bolstered by the temporary income tax surcharge. That surcharge will expire on June 30 of 1991.

The upcoming months present you as a local municipal official, and the League with a mutual challenge. That challenge, while common in goal will have individual components. It will be complex and demand our all out effort. That challenge requires each and every one of us involved in municipal governance to examine needs and requirements. It necessitates an explanation of those needs and requirements to the members of the General Assembly.

The municipal portion of the temporary income tax surcharge will be examined closely. That scrutiny must provide answers to the General Assembly and Governor Elect Edgar. The answers need to detail what projects the money was spent for, and what projects still need to be accomplished. In short, municipal officials must convince the Governor Elect and General Assembly to permanently enact the additional income tax and keep the current distribution of revenues.

Governor Elect Edgar has announced he will call a special session of the General Assembly early in 1991 to consider property tax. The issue of property tax reform may well be under active consideration in the next couple of months. The combination of property tax limitations and income tax surcharge will certainly be of interest to all municipal officials.

It is essential that as local elected officials you represent your municipal issues. The cost of running a municipality and paying the necessary obligations must be stressed to the General Assembly. Every year the State of Illinois places burdens on municipalities. Those burdensome mandates (i.e. pensions, health insurance for retirees, environmental costs, criminal code changes, civil liabilities and new programs) in turn force municipalities to implement laws. That inplementation costs revenue. Those revenues drive tax levies up. Explain to the General Assembly they hold an important ability in keeping property taxes down. The state can simply stop mandating programs without revenues to implement them. Incidentally, the Federal government causes the same problems.

Inform the General Assembly and Governor Elect about your use of property taxes. Ask them to take a responsible approach to legislation affecting your revenues. Make your case for the permanent income tax.

NOW IS THE TIME FOR ACTION.

December 1990 / Illinois Municipal Review / Page 7