City and county governments in East Central Illinois say they will lose millions of dollars under Gov. Pat Quinn's proposal to cut the state's income tax-sharing program.

And that will mean cuts in services and perhaps layoffs, officials say.

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.

"I don't want to alarm people to the extent where they think no one will come if they call 911, but certainly we can't continue to cut without having more very clear service reductions," said Champaign Finance Director Richard Schnuer.

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.

The state already is four months behind on its shared revenue payments to Champaign, and Quinn's proposed cut is on top of decreased revenue from income tax over the past few years.

"Even the portion that's currently shared is down," Schnuer said. "And that would cut on top of that."

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.

In Monticello, the reduction 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."

The thing that frustrates Corrie most, he said, is the state is trying to look like 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 the 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 Champaign 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 running 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.

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