State cuts to Local Government Distributive Fund are property tax increases in disguise
All working individuals in Illinois pay state income tax.
A portion of our state income tax is then distributed to local governments — our city and county. The portion each city and county receives is based on population. So we as taxpayers pay income tax to the state and a portion of that income tax is sent back to our town of residence.
That’s the Local Government Distributive Fund.
The LGDF began in 1969 and has historically been structured so that 10% of the total income taxes paid to Illinois is then distributed directly back to municipalities. In the last 10 years, Illinois has reduced the portion of income tax returned to cities and towns. Today, the LGDF receives only 6.06% of total personal income tax the state receives, a reduction of nearly 40%.
Tom McNamara, Mayor of Rockford