State Senate Republican Budget Plan Draws Criticism From Palatine

A Republican state Senate budget plan is drawing heavy criticism from Palatine village officials.

The plan lays out how Senate Republican's would reduce spending and eventually rollback the state which was approved earlier this year. The tax rate was increased from 3 percent to 5 percent.

State Sen. Matt Murphy, R-Palatine, said despite the tax increase Illinois faces mounting budget deficits in the billions in coming years. He said meaningful spending cuts which will allow the income tax to be rolled back and will place Illinois on firm financial footing are needed.

Palatine officials are concerned about a portion of the proposal that would reduce what is referred to as "local share." The state collects various tax revenue a portion of which is disbursed to municipalities such as sales tax, income tax and motor fuel tax.

Palatine receives about $13 million in local share revenue. The Senate Republican plan would reduce this by about 5 percent across the board, or about $700,000 for Palatine.

"What's being presented by cutting the local share piece, could be argued, is state wide the largest property tax [hike] this state's ever seen," said Palatine District 2 Council member Scott Lamerand.

"The idea that in doing this, at some point down the road in 2016 the income tax is miraculously reduced and your property taxes haven't gone up is, for anybody who has lived here and watched this state legislature work, insane," Lamerand said.

Lamerand who chairs the village's Business Finance and Budget Committee was speaking in generalities about the potential impact reducing local share could have throughout the state. He said if the reduction occurred Palatine would consider all options, including cuts to services. A $700,000 hole in the budget would equate to the elimination of about 7 full-time employees.

Lamerand said Palatine has worked hard to control its spending and should not be punished because the state has not been able to manage its finances.

Murphy said the Republican plan lays out $6.7 billion in cuts, of which only $300 million is local share.

"I appreciate the difficult situation [Palatine] is in," Murphy said, adding that many of the municipalities in his district have been fiscally responsible. Murphy said he would be willing to look at state unfunded mandates and other issues to try to mitigate the potential impact of a reduction in local share.

However, Murphy took issue with the notion that a reduction in local share would simply be passed along by local municipalities via property tax increases to residents.

"They do not have to pass that along," Murphy said, adding that it was inaccurate to characterize it as a tax shift.

Whether the reduction to local share, or any of the Republican budget proposals gain traction, remains to be seen. The Republicans are in the minority in the state legislature.

Regardless, Lamerand said he found it offensive that local share even was on the table for consideration.

"The audacity to say 'everyone needs to make a sacrifice because we [the state] can't control  spending,' " Lamerand said. "It doesn't make any sense."

Part of the discussion about local share is a philosophical argument. Is the money state revenue, or is it local revenue that the state simply has to disburse?

In Lamerand's view, local share is Palatine tax dollars and the proposal was essentially the state holding on to tax dollars that rightfully should be controlled by the village.