PEORIA — Local governments in Peoria, Tazewell, Woodford, Fulton, Knox, Marshall, Mason, Putnam and Stark counties can expect to get about $22 million less this year from a longstanding stream of state tax proceeds, according to data released by the state Department of Revenue.

Partly it's because there's slightly less money coming into the fund that the state pays out to municipalities as part of the Personal Property Replacement Tax. But it's also because under the new state spending plan passed in July, what last year was a $1.4 billion statewide stream of money is being cut by nearly $300 million to help fill in the Land of Lincoln's budget gap.

For years local governments have gotten funds from the state out of the PPRT fund to make up for the fact that the locals lost the power to individually tax businesses' personal property under the 1970 Illinois Constitution.

For the city of Peoria, which stands to receive $1.8 million less in the coming year, it's news that "obviously doesn't help the budget," city manager Patrick Urich said.

And it comes on top of potentially up to $1 million less the city is expecting because of a new service fee the state added for the collection of sales taxes — meaning the state changes comprise a significant part of the $8 million budget shortfall the city projects in the coming year.

"This is just another example of the state pushing their fiscal difficulties down to the local level," Urich said. "... It's an abdication of their responsibility to balance their own budget, instead taking the easy way out and making it a local government's problem."

The reduction is equivalent to the budget for the city's entire IT department.

Local governments, though, have been cautious the last few years in estimating state revenue — particularly after state officials discovered an error in April 2016 in overpaying PPRT funds to municipalities and announced plans to recoup the overpaid cash in the following year. That was completed last year, the state said in its release of estimates for the current fiscal year.

Peoria Public Schools estimated conservatively last year, and ended up getting $2.5 million more from the fund than they expected. For the current year, they'd figured on getting $1.5 million less but instead stand to see a $3 million reduction — the equivalent to salaries for 40 teachers.

But low-balling the estimate last year "does cushion things some" in terms of receiving less in the current year, PPS chief financial officer Mick Willis said.

"In terms of impact, we will hold the line on costs budgeted for this year," Willis said.

While the education funding plan that ultimately passed the Legislature contemplates more funds for PPS in the coming year, the district's budget actually estimates no increase in state dollars — another calculation that may aid in balancing out the PPRT loss.

Likewise, in Pekin District 108, which stands to lose $1 million in the coming year, superintendent Bill Link said the district has always tried to maintain some flexibility for changing state revenue.

"... A reduction is not a deal breaker, and we have learned to adjust to fluctuations in this revenue source (while) always hoping for the best," he said, adding that, like PPS, their estimated revenue for last year from PPRT funds was lower than what they actually received.

At Illinois Central College, the school stands to see $762,000 less in PPRT funds, but it likely won't affect the school's budget much, executive vice president Bruce Budde said, again because of conservative budgeting on what will be received.

"Unfortunately the PPRT has traditionally been an unpredictable revenue source for the college, but fortunately is not a significant source of revenue," he said.

Still, it can be "a significant challenge to manage our operations considering the unpredictable nature of state funding, regardless of the source."

For Peoria County, again grappling with a tight budget for the coming year, there's likely to be a $384,000 loss to the general fund budget, as well as some smaller decreases to other funds across the county, including in the Health department, making it a "revenue loss that has the potential to impact services," county administrator Scott Sorrel said.

It's too soon to tell what the impact there might be, he said, though the county had anticipated potential decreases.

Several hundred other, smaller governments — cities, park districts, library districts, townships, street light districts and others — also stand to see decreases. A full chart can be seen below. 

Chris Kaergard covers politics and government. He can be reached at ckaergard@pjstar.com or 686-3255. Follow him on Twitter @ChrisKaergard.

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