County board association looks to increase share of income taxes Illinois owes local governments

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The Illinois Association of County Board Members says it is time to amend the Illinois Income Tax Act and give back more to local governments.

Until January 2011, 10% of total income tax collections was dedicated to the Local Government Distributive Fund (LGDF) for distribution to municipalities and counties. That share of state income tax revenue was reduced to 6% following the enactment of the temporary income tax increase in 2011.

In July 2017, the income tax was permanently increased and the local government share was reduced to 5.45% of individual income tax collections and 6.16% of corporate income tax collections for fiscal 2018.

Taylor Anderson, a lobbyist for the Illinois Association of County Board Members, said during a University of Illinois Extension webinar Monday the change has been detrimental to local governments.

“I looked at what local governments have lost out on since the Local Government Distributive Fund has been cut in half, and it is a shocking number,” Anderson said. “It's hundreds of millions of dollars.”

The Illinois Municipal League also has voiced strong opposition to any reduction to LGDF as it only amplifies the fiscal challenges local governments face.

Senate Bill 3010 would amend the Illinois Income Tax Act and increase the local percentage to 8% of the net revenue realized from the tax imposed upon individuals, trusts, estates, and electing pass-through entities to be deposited into the LGDF.

Anderson said the recent cancellation of a number of legislative session days could throw a wrench into the effort.

“There are only so many hours in the day,” Anderson said. “There are only so many committee hearings a single legislator can be at at the same time. It is really going to be quite interesting on how this plays out.”

The General Assembly met for one day this month, on January 5th, but have canceled subsequent sessions since over health concerns surrounding the latest surge of COVID-19 cases in the state.





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