R2010-60 OPPOSING GOVERNOR QUINN'S PROPOSED REDUCTION IN MUNICIPALITY'S SHARE IN THE LOCAL GOVERNMENT DISTRIBUTIVE FUND

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a � COUNCIL MEMORANDM 2010—06 March 24, 2010 TO: Honorable Mayor McElroy and City Cou il Members FROM: Ryan P. McCrady, City Manager � RE: Income Tax Reduction Resolution � Governor Pat Quinn has proposed reducing the amount of income tax revenue paid to cities across the state as a means of addressing State of Illinois' budget situation. While the reduction would have minimal impact on the state's budget, the resulting effect on the city's financial situation could be catastrophic, resulting in a cut of about $2 million that normally goes to fund city services. As you know, the city is already working to fill an anticipated $4.5 million budget deficit next year and expects to have reduced the city workforce by 51 jobs, or more than 9 percent, by fiscal year 2010-2011. Under the proposed plan, we estimate that we will have to cut an additiona120- 40 jobs — more than 16 percent of our total work force - which we would expect would have major impact on all city services, including public safety. The attached resolution is being presented as a means of expressing the City's opposition to the proposed cuts to income tax revenues, funding which for decades has represented a significant funding source for cities statewide. The State of Illinois relies heavily on revenues generated by our cities, revenues that will be reduced considerably if the viability of municipalities are threatened. That will almost certainly happen if the proposed reduction becomes a reality.