Officials object to freeze on local share of funds
State and local officials are objecting to Gov. Pat Quinn's proposed freeze in state funds distributed to cities, counties and mass transit systems throughout Illinois.
Quinn's budget, released on Wednesday, includes a recommendation to disallow $241.2 million of what have been automatic transfers to about 80 different funds.
The Legislature would have to approve the change.
The largest two of the transfers are to local governments, an estimated saving to the state of about $68 million next year, and to downstate public transit systems, an estimated saving of $44 million.
The money to local governments comes through the Local Government Distributive Fund, which was developed in 1969 when the state enacted the income tax.
If approved by the Legislature, funding to cities, counties and transit districts would be frozen at fiscal year 2012 levels.
"We're just trying to hold the line, prevent new growth," said Abdon Pallasch, a spokesman for the Governor's Office of Management and Budget. "By holding some automatic transfers out to FY 2012 levels ... the state could avoid further cuts in state aid to schools around the state or cuts in services for the elderly, the people with disabilities and mental illnesses and our most vulnerable that the state cares for."
But mayors and local legislators said Friday they would fight the freeze.
Rep. Chad Hays, R-Catlin, blamed the Quinn administration for not moving quickly enough on Medicaid reforms that were supposed to save $350 million this year. Because of delays they're now estimated to save just $150 million.
"We're not going to have anywhere near the savings that were promised," he said. "I've been telling all my local governments to be on the lookout for Springfield to be after them again."
Sen. Chapin Rose, R-Mahomet, said he would oppose Quinn's proposal and said again the governor appears to be aiming the most severe of his budget cuts at downstate Illinois.
"If you look at this supposed notion of shared sacrifice, he's whacking K-12 and higher ed, but with payroll increases at all of his agencies," said Rose. "And with these cuts to local governments the thing that is lost on everyone is that this is not our money. This is money that is collected by the state on behalf of local governments. It's not ours to keep."
Rose, whose district includes Decatur, said he also would fight the suggested cuts to mass transit.
"What ends up happening with downstate transit is that this is your senior citizens' ride to the doctor. A lot of that is the dial-a-rides for seniors to see their doctor," he said. "I still think that this guy has essentially declared war on downstate Illinois with this budget."
Sen. Mike Frerichs, D-Champaign, said he too believed the cuts were inordinately directed to downstate.
"My hope is that we in the Legislature can make sure that the pain is spread more evenly around the state," he said. "I would be opposed to the governor's proposals. It is fair to say that there is going to be pain in this budget and there are going to have to be cuts made, but I'm going to make sure that anything I vote on spreads the pain around the entire state, not just downstate."
He said the cuts to local governments "just push the state's problems on local governments and probably would result in property tax increases, something I always have opposed."
Champaign Mayor Don Gerard said he already has sent letters and made phone calls to business and economic development groups to mobilize opposition.
"To my mind the city of Champaign has come back from the recession. We're creating jobs, we're growing, we have a triple A credit rating and we should be rewarded, not kicked back and told, 'You owe your share even though you weren't part of the problem,'" Gerard said. "We didn't create the state's pension problems."
Danville Mayor Scott Eisenhauer said the cuts would be devastating to the city. He estimated the local government funds cut would mean the loss of about $125,000.
"That would have a seriously detrimental impact on our budget," he said. "That's $125,000 out of budget that's already been balanced at a time when we've already reduced our property tax by a half-million dollars and we were hoping to move forward without any significant reduction in services to our citizens.
"That's what I find interesting about this discussion. I heard people in Springfield say that they need this money so that they don't have to end social programs, don't have to end meals for senior citizens. Well OK, but what they do instead is force all of those same decisions onto local government."
Danville Mass Transit could lose an even bigger amount.
"We are experiencing 50,000 riders a month," he said. "We're getting requests now to extend our hours and our services, not to cut back. So any freeze of funding would force us to review the service we're providing and whether we can maintain it."
The director of the Illinois Public Transportation Association said the group would be willing to negotiate a smaller increase in funding next year but would oppose a freeze at 2012 levels.
"Certainly we would not be in support of this particular proposal," said Laura Calderon of IPTA. "We have a committee that is exploring the issue, not because of the governor's overarching concern with these funds but more so it would be difficult to sustain a 10 percent growth."
The Downstate Public Transit fund, with revenue from sales taxes, grows at a 10 percent rate every year.
"Obviously when your revenue generator is sales tax and even in a good year the sales taxes don't grow at that rate, it's difficult to sustain that," Calderon said. "I think the purpose when the 10 percent growth was initiated was to allow these systems to grow their services for a while. Most of these systems have had the opportunity to do that."
Bill Volk, director of the Champaign-Urbana Mass Transit District, said he supported "slowing down the increases because we have concerns about the long-term viability of the current funding mechanism."
This year the C-U MTD is to get nearly $25 million in state operating assistance and would get as much as $27.46 million next year if the transit funding was unchanged.
"If we had a slowing down at this point, or even if we got flat-lined, it would not impact our day-to-day operations in the short term," he said. "It has an impact in the short term relative to our ability for capital replacement, but in the long term by slowing that growth down it would prolong the life of the fund."