Local leaders fear proposed state budget cuts

Budget cuts proposed by Gov. Pat Quinn could not come at a worse time for cities and counties already receiving less revenue because of the depressed economy, mayors and administrators in Tazewell County said Friday.

As part of a larger budget proposal announced Tuesday, Gov. Quinn included cutting $300 million in income taxes distributed to municipalities and counties. Along with state sales taxes, state income taxes are often one of the largest funding mechanisms in local governments’ general funds.

The cut would amount to a $698,000 loss in revenue in Tazewell County’s general fund, County Administrator David Jones said.

“In a word, that would be disastrous,” he said.

The county’s current fiscal year, which began in December, had budgeted $2.33 million for income tax revenue, which is about 11 percent of the total general fund, he said.

“So a 30 percent reduction (in income taxes) would translate into some extremely difficult decisions for the county board and some significant consequences to the county’s services,” he said. “Essentially our core services are paid for from that fund. It would have really negative ramifications for the county in terms of service levels and staffing levels.”

Filling the gap with reserves would be an irresponsible way to cover what would be a structural deficit, Jones said.

The immediate priority will be to work with the county’s legislators to see if the cuts can be avoided, Jones and Tazewell County Board Chairman David Zimmerman said.

“For years and years Tazewell County has been very judicious and has always had a tight budget, and now I feel like we’re being penalized for what they did down in Springfield,” Zimmerman said.

“Having said that, if these cuts do go through, our biggest asset and our biggest line-item is payroll. And with the size of the cuts they’re talking about now, I don’t see how we can avoid layoffs if this does indeed come to pass.”

Zimmerman said the board would have to reopen the budget and make the needed modifications with a two-thirds vote, if the cuts passed the legislature.

City of Washington Administrator Bob Morris said Quinn’s proposal would cut about $300,000 in income tax revenue for the city.

Washington’s fiscal year 2011 begins May 1, he said, and the city had planned to receive $987,000 in income taxes from the state, or about 15 percent of its $6.421 million general fund.

“We’ve already taken a pretty significant decrease from the downturn of the economy,” he said.

“That would be the biggest single hit on any line item that we have seen since the recession started hitting all of our income lines.

“Obviously, all cities have already taken a significant decrease because of the recession, just like the state has. But to ask us to give up some of our income tax money on top of what we’ve already lost so the state can address its problems seems like a double hit to me.”

Morris said the city has not yet discussed in depth what cuts, if any, would be made to cover the loss of revenue.

Morton Mayor Norm Durflinger did not have the exact dollar amount on-hand that the village would lose if the cuts were to pass, but said it would be in the $300,000 to $350,000 range. Village Business Manager David Stroll could not be reached for the exact number.

“It’s going to be devastating,” Durflinger said. “We just cut $1.68 million and that was very difficult to do. Now we may have to cut whatever number and that’s going to be even harder to do because now it’s really going to hurt.

“What I’ll have to do is go back to department heads and ask them to come up with some recommendations.”

East Peoria Mayor Dave Mingus said the cut would result in approximately $500,000 less in income taxes coming to the city.

East Peoria and other cities are also reporting the state has not sent out the last four months of income taxes owed to the city.

“It’s been difficult, but not totally unexpected,” he said.

Mingus said the city’s general fund is approximately $40 million, and that the city was projecting to receive about $2.3 million in state income taxes in the 2011 fiscal year.

East Peoria’s fiscal year also begins on May 1, and it is still in the budget creation process.