Cities struggle as state pockets tax dollars

Posted:

Decatur, Ill (WAND) – The state of Illinois raked in more money then expected from a 2% fee imposed on local governments to collect their sales taxes and those cities, villages and towns are paying the price.

The state took in $50 million dollars in the first 8 months of the fiscal year well above the projected amount.  The state takes in sales tax and distributes it back to local governmental units.  The legislature imposed the fee as part of a deal to end the state budget crisis last summer.  But the fee is having a negative impact on communities across the state.

City Councilman Pat McDaniel said Thursday the fee has cost the city of Decatur about $200,000.  Decatur is also losing hundreds of thousands of dollars as the state drains off money from income tax receipts.

Decatur is attempting to avoid increases in fees and local taxes.  But doing so could result in cuts later this year.

Current Conditions
/