Updated at 3:50 p.m.: Even before Gov. Pat Quinn formally proposed his budget that includes a cut in the state revenue sharing program with cities and counties, there were howls from local government.

Champaign stands to lose $1.7 million in shared revenue from the state if Wednesday’s budget proposal makes its way through the state Legislature.

Champaign Finance Director Richard Schnuer said Wednesday that cut is on top of decreased revenue from income tax over the past few years.

Quinn on Wednesday told legislators that he wants to lower the income tax revenue that the state shares with municipalities from 10 percent to 7 percent.

“Even the portion that’s currently shared is down,” Schnuer said. “And that would cut on top of that.”
And it gets harder to cut as each year’s budget numbers come in, he added.

A cut like Quinn’s proposal likely would mean cuts in city services and staff, though Schnuer said it is premature to speculate on how or where exactly those cuts would come.

“Certainly for city management and city council, avoiding layoffs would be a goal,” Schnuer said.

The state already is four months behind on its shared revenue payments to Champaign, and further cuts to services are imminent.

“I don’t want to alarm people to the extent where they think no one will come if they call 911, but certainly we cant continue to cut without having more very clear service reductions,” Schnuer said.

In Monticello, it would mean a cut of roughly $124,000, according to Mayor Chris Corrie.

"It’s going to take a pretty big bite out of our plans," he said. "That tax we get is one of the top four revenue generators for Monticello. It’s going to be kind of tough on us."

Corrie said the state is trying to look as if it is not raising taxes, but local governments may have to raise their taxes.

"They are really hurting the little guy who is doing a pretty good job," he said.

The state Legislature and governor need to do both -- raise taxes and cut spending, he said.

"It’s going to have to take a little responsibility on both sides," Corrie said. "They can’t shove everything on us."

Champaign County Administrator Deb Busey said Quinn’s planned reduction would mean a loss of $795,000.

“To us that’s a 30 percent drop in the revenue stream,” Busey said at Tuesday’s county board committee of the whole meeting. “In 2008 that generated over $3 million.”

In Urbana, the proposal would mean a loss of $1 million, according to Mayor Laurel Prussing.

The Urbana figure is based on cities getting $77 for each resident from the tax.

"So if it goes down to $44 per capita, that means we lose $1 million," Prussing said. "So that means, instead of bridging a $1.4 million gap, we have to bridge $2.4 million."

In Tuscola, City Administrator Drew Hoel said the proposed cuts would mean a loss of one third of the city's discretionary funds.

"For us, if those numbers are accurate, that would be $100,000, " he said.

"We have managed our fiscal our budget responsibly," Hoel said. "We have already cut our budget. We have cut programs. We have not replaced employees lost through attrition. From my perspective, what’s frustrating, is we have done all of those things that are responsible. I haven't seen a lot of that from the state."

Busey said the county already has taken a $1.2 million hit from the state because of late payments. In the last 15 months, she said, the county has received only 11 months of revenue sharing.

“So for starters they’re not paying us what they’re collecting anyway,” Busey said.

She said county officials had learned of the revenue sharing reduction on Monday.

“So our preliminary approach  is lobbying the state representatives and senators to  not do this,” she said. “To put this in perspective, we cut $1.2 million from the general fund budget last year. For personnel that was (a loss of) 30 positions.”

Even without the loss of revenue sharing, Busey’s updated budget for the 3-month-old fiscal year projects nearly $700,000 in reduced revenue this year. Sales tax collections so far this fiscal year are runing at only 86 percent of projections, she noted.

“Losing $795,000 we would practically have no fund balance left at the end of the year,” Busey said. The balance would be about $500,000, less than the county’s monthly payroll.

Human services statewide would be cut $276,000, according to Prairie Center CEO Bruce Suardini. For Prairie Center Health Systems in Champaign, that's $180,000 or about  8 percent of their budget, he said.

Statewide cuts in addiction treatment funding will be about $7 million, Suardini said.

The Prairie Center board of directors will sit down and look at the numbers, he said. The center was projecting cuts of 10 to 14 percent.  However, the financial squeeze is worsened by continuing delays in state payments.

Prairie Center had to close temporarily last year due to state payment delays, he said.

"Last year, we were out about $500,000," Suardini said. "We’re now about 45 days (late) now  and $175,000. It’s just devastating when you look at it. Half of the money is already owed."

News-Gazette staff writers Steve Bauer and Patrick Wade contributed to this report.