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Governor’s State of the State Address and SFY 2022 State Budget Address

February 19, 2021 | Legislative briefs
Governor JB Pritzker just presented a combined State of the State Address and State Fiscal Year (SFY) 2022 State Budget Address. Linked below are three separate documents for your information:

The Governor discussed many issues of interest to the Illinois Municipal League (IML) and municipal officials across the state, including funding for education and infrastructure. For SFY 2022, the Governor’s budget proposal requests $41.588 billion in state spending and projects that state revenues will be $41.708 billion, providing a surplus of $120 million.

As usual, IML was provided with an advanced briefing on the topics discussed in the Governor’s presentation. IML has also been in contact, weekly and often daily, with the Governor’s leadership team about their budget preparations; and, late Tuesday night, IML offered IML’s assistance and guidance to support the state but to preserve and protect local governments.

The main area of concern for IML is the Governor’s proposal for reduced disbursements to municipalities from the Local Government Distributive Fund (LGDF). LGDF, as you already know, is the local share of the state’s income tax. IML’s fact sheet on LGDF is available via this link.

For SFY 2022, the Governor’s proposed budget cuts LGDF by 10%, which is a $152 million reduction for municipalities and counties statewide when compared to SFY 2021. To be clear, the Governor’s budget proposal means municipalities will receive a 90% share of LGDF revenues, based on the SFY 2021 distribution rate formula, instead of 100%.

However, the Governor is also proposing that various tax loopholes for corporations be closed or modified. The Governor’s Office projects that these changes, if enacted as proposed, will provide local governments with an increase of $228 million statewide in LGDF disbursements. It should be noted that this is at the proposed 90% funding level. Local governments would have seen a much-needed increase if LGDF was not cut by 10% and all new revenues were subject to the full LGDF disbursement formula.

IML will continue to aggressively advocate against a reduction in LGDF and, instead, return it to the original full share of all income tax collections. In addition to LGDF, IML continues to work to protect other state-shared revenues such as Use Tax, Personal Property Replacement Tax (PPRT) and Motor Fuel Tax (MFT).

The Illinois Municipal League maintains a constant presence at the state capitol and is honored to serve as your voice to the Governor and General Assembly. Additional information about the state budget and updates from the Spring legislative session will be provided through IML's Statehouse Briefing and other IML communication tools.
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