Synopsis As Introduced Amends the State Finance Act. Creates the Financially Distressed Cities Fund. Amends the State Revenue Sharing Act and the Illinois Income Tax Act. Provides that the Treasurer shall monthly transfer to the Financially Distressed Cities Fund an amount certified by the Department of Revenue equal to: (1) the amount that would have been distributed under the State Revenue Sharing Act to all financially distressed cities if the Treasurer had transferred to the Local Government Distributive Fund a sum calculated using 0.10% of the net revenue realized from the tax imposed by the Illinois Income Tax Act upon individuals, trusts, estates, and corporations during the preceding month; and (2) subtracting the amount distributed to all financially distressed cities from the Local Government Distributive Fund. Provides that the Department of Revenue shall monthly allocate an amount from the Financially Distressed Cities Fund that shall be paid to each financially distressed city. Amends the Financially Distressed City Law of the Illinois Municipal Code. Makes the law applicable to both home rule and non-home rule municipalities. Provides that a State agency or unit of local government may also render technical assistance to a municipality's Financial Advisory Authority as the Authority may request. Provides that the State shall not reduce revenues or impose additional costs affecting a financially distressed city affecting the municipality unless it is consistent with the Financial Plan and Budget in effect. Provides that State mandates enacted while a municipality is designated as a financially distressed city that would cause the municipality to incur costs are not valid or enforceable during the period when the municipality is under the financially distressed city designation. Effective January 1, 2020.
Fiscal Note (Dept. of Revenue)
As written, this bill would have no income tax revenue impact, nor would it have any impact on the General Revenue Fund. Although it appears that the intention of the bill is to provide more funds to "financially distressed cities" by transferring money from the General Revenue Fund to the newly created Financially Distressed Cities Fund, the formula used to determine the amount of that transfer does not accomplish this. For any amount of money to be transferred to the Financially Distressed Cities Fund, the formula needs to be based on a percentage greater than current Local Government Distribution Fund (LGDF) diversion rates (for fiscal year 2020, the LGDF rates are 6.06 percent of net individual income tax receipts and 6.85 percent of net corporate income tax receipts). The percentage used in this bill is 0.10 percent.