The governor’s proposal to make huge cuts in funding to state universities is the big news today, but municipalities are facing a similar threat.
At Monday’s council meeting, DeKalb’s finance director will present the mid-year budget report. The city appears to be pretty much on target for the current fiscal year, but administrators are concerned about possible future cuts to DeKalb’s share of the state income tax (see p. 26) if the governor gets the budget he wants.
Income tax started out on pace at the beginning of the year and has slowly fallen behind budgeted dollar expectations. Dollars are projected to come in slightly below budget at $4.15 million. Please note this revenue source is a part of the Local Government Distributive Fund (LGDF) which is currently collected and disbursed by the State of Illinois based on a per capita basis. With a new Governor, there has been discussion about perhaps eliminated [sic] these funds or changing the distribution allocation.
The current budget proposal doesn’t eliminate the income tax LGDF, but if passed would halve it. The impact on a given municipality would depend on how much of its budget depends on income tax. In DeKalb’s case it makes up about 12.5% of the operating budget so its absence would definitely cause pain.
This is not the first time a governor has targeted income tax payments to municipalities, and I identified this vulnerability as early as 2010. Even if we dodge the bullet this year, we should start talking about how to reduce dependence on this revenue source for funding operations.
Related: “Budget Addresses Have Consequences” at the Capitol Fax.
Filed under: City Watch
, State Watch
| Tagged as: budget
This post updates one from August about Ty Fahner, partner of the law firm Mayer Brown, who told the Chicago Civic Committee the following last spring:
Last March, during a Civic Committee discussion of the state’s public pension problems, Fahner claimed that some members had talked to bond ratings agencies about lowering Illinois’ bond rating to create more pressure for pension reform.
Lowered bond ratings lead to higher borrowing costs, which is bad enough. Worse yet, Mayer Brown was Illinois’ contracted bond counsel for a million a year.
Let’s just say the optics were bad.
And yes, I did write that Mayer Brown “was” the state’s bond counsel. The Quinn administration announced it has selected another firm, Chapman & Cutler, to serve in its place.
Thought you’d like to know that the right thing happened.
(Tip o’ the hat, once again, to Capitol Fax.)
In a post from January 10, I told you I’d continue trying to get information about the state’s Public Library Construction Grant Program since we knew so few of the institutions that won them.
Part of the reason it has taken so long to get back to you is that I goofed up my chance to fight for the information. Yep, I sure did. Since the Illinois State Library had always responded quite fully and promptly to previous Freedom of Information Act requests, I didn’t bother to make a copy of the request for the list of awardees. This time they denied me the document and I was unable to ask for a review of the decision because under FOIA you must provide a copy of the original FOIA request along with the Request for Review.
The lesson here, of course, is not to trust anybody — not even librarians. Read the rest of this entry
I can’t believe hikes in taxes are even up for discussion.
Consultants estimated one option for renovating City Hall – including upgrades to the heating and cooling system, plumbing and fire protection system, among other things – would cost $3.7 million. City Council members also are exploring spending $7.5 million on renovations, with $5.5 million of that coming from tax increment financing dollars and $2 million coming from increases to gasoline taxes, water bills or property taxes.
From the article it sounds like Aldermen Jacobson, Snow and Baker do not support a plan to raise our taxes for this. Good. It’s bad enough the city will likely have to use TIF money to upgrade the HVAC instead of addressing our rotting neighborhoods, but raising taxes to put council chambers on the first floor would be absolutely obscene in view of the bills coming due for unpaid pension liabilities, public building construction and whopping raises for the rookie staff.
As an aside, I returned to my old home town in Indiana last weekend — you know, the one with real TIF oversight and an Ethics Commission, among other things. We paid 7% tax on our lunch bill, and when we went downtown near 7 p.m. on Friday we found the sidewalks filled with students and families and all the downtown shops lit and open.
They are doing it by filing a lawsuit to let a judge decide. From the Journal-Standard:
Freeport Township now looks to the court system to see if last year’s joint purchase of the property at 206 E. Stephenson St. with the Veterans Assistance Commission [of Stephenson County] was legal.
“An opinion by attorney Greg Pelini says that a township can co-own a building with a municipality,” said Mike Phillips, attorney for the Freeport Township. “The VAC[SC] is not a municipality and according to the opinion we are not authorized to co-own a building with them. We have no authority to do it.”
The pending lawsuit includes the VAC[SC], Security First Title Company and local businessman Dave Fonda as defendants. The township and VAC[SC] jointly bought the property that they currently share from Fonda for $366,971 and moved there in January.
The basis for the lawsuit is three counts, according to the article. The court is being asked to determine whether the VAC[SC] is prohibited from entering into contracts to buy property unless it’s partnering with a municipality, whether the electors of the township should have voted on the purchase, and whether the township failed to appropriate funding to cover operational expenses in the new building.
I guess theoretically a positive finding on any of these counts could result in vacating the purchase, though the township seems to prefer just to find a way to make it legal if it currently isn’t. The township is not asking for money damages.
However, back when the deal was made, a Stephenson County blogger found even more to trouble residents about the joint purchase than what is found in the suit. Read the rest of this entry
Illinois’ Mercer County lies south of the Quad Cities and comprises part of its metro area.
Perhaps you’ve heard that the county’s treasurer, Mike Bertelsen, has been arrested and charged with stealing at least $13,000 from the county’s 911 Fund, the result of investigations that followed a forensic audit in the county office.
The Illinois Policy Institute has pointed out Mercer County transparency failures that IPI counts as red flags:
A lack of online transparency
A failure to file annual reports on a timely basis
Violations of the Freedom of Information Act (FOIA)
Violations of the Open Meetings Act (OMA)
I’ve suggested before that failures to turn in Comprehensive Annual Financial Reports (CAFRs) and Tax Increment Financing (TIF) annual reports to the state might signal trouble, as tardiness correlated with financial corruption cases in Alorton and Dixon.
The violations of OMA and FOIA are either mostly or wholly related to Mercer County’s hideously dysfunctional and incomplete website. FYI: Dixon’s wasn’t much better at the time Rita Crundwell’s crimes were discovered. Read the rest of this entry
I haven’t seen this story anywhere else but at Rich Miller’s Capitol Fax.
Let’s put it in a nutshell and provide lots of links for you to explore further if you wish.
Tyrone C. “Ty” Fahner is a former Illinois attorney general, partner of an international law firm that does business with the State of Illinois as bond counsel, and president of the Civic Committee of the Commercial Club of Chicago.
Last March, during a Civic Committee discussion of the state’s public pension problems, Fahner claimed that some members had talked to bond ratings agencies about lowering Illinois’ bond rating to create more pressure for pension reform. Read the rest of this entry
DeKalb’s expenses are outpacing revenues:
The city will spend at least $30 million from its general fund, a 5.4 percent increase from this fiscal year. The city’s general fund pays for city personnel, equipment, and contractual services.
The city is projecting $31.1 million in revenue for fiscal 2014, a 4.2 percent increase from this fiscal year. In fiscal 2014, the city is paying $750,000 more on police and fire pensions out of their general fund.
Today I want to look closely at the revenue increases.
In dollars, the 4.2% expected net increase equals $1.08 million, which will cover the pension contribution hikes plus a bit more. However, so little of it comes from natural growth that you won’t need to pull out the tarot cards to see a shaky future. Read the rest of this entry
Just in time for Sunshine Week, I’ve re-scored the City of DeKalb’s website transparency score from scratch.
Does it come anywhere near the Illinois Policy Institute’s score of 88.1 points? No.
But at least I have found out why. Check out the scoring rubric, here. This is the one I used both in December 2010 and yesterday, but it’s been unhooked from the main scoring page. You can see that six of the 10 categories originally required documents to be searchable for full credit, but this requirement eventually got dropped in favor of simply encouraging the posting of more documents online.
Without further ado: Read the rest of this entry
Because the local library applied for a state construction grant in 2012, I decided to read up on these grants. One result of the research is doubt that all the money from a new library grant “pot” has all gone to libraries — but I am having a difficult time finding out for sure. This is a progress report for citizen watchdogs and others interested in state level grant programs, the Illinois State Library and/or the Freedom of Information Act.
Sandwich Public Library found out about its $1.6 million construction grant award months ago, but word is just now circulating. DeKalb Public Library was likewise notified in July that it wouldn’t receive an award this fiscal year, yet suddenly now it’s getting $8.5 million from the state for its planned expansion.
The questions that arise out of these announcements — and their peculiar timing — are related to what I would describe as an uncharacteristic lack of transparency by the Illinois State Library in administering a $50 million construction grant program. I’ve used the Internet and, just lately, the Freedom of Information Act (FOIA) to try to part the curtains.
Though the FOIA adventure continues, having local libraries and their good fortunes in the news seems a reasonable excuse to lay out the story so far, so here goes. Read the rest of this entry