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Impact of state budget adoption on Joliet discussed

The Joliet City Council this week took time to review the impact of the State of Illinois’ fiscal year 2019 budget on the city.

Gov. Bruce Rauner recently signed into law a $38.5 million dollar spending plan for the state government. While Illinois’ operations budget is balanced, it does not address the backlog of unpaid bills.

City Manager David Hales wants people to be aware of the positives and negatives to the passing of the state’s fiscal year 2019 budget.

“Last year’s budget had some negative financial impact on the city,” Hales said.

There are three ways the legislation could impact the city of Joliet, one being a reduction of local government distributive funding.

Last year, the state cut that distribution by 10 percent. New Legislation states that it will be cut by 5 percent.

“So far, this year, in four months, they’ve already taken $640,000,” Director of Finance Jim Ghedotte said. “The savings could be greater, if the income tax money comes in [lesser] than the last six months of last year.”

Joliet also anticipates being assessed a fee based on the level of local sales tax generated.

In July 2017, the state applied a two percent fee for the processing of local sales tax dollars by municipalities. Prior to then, this charge was not assessed to municipalities.

Ghedotte said last year, the city lost $260,000 as a result.

The city’s sales tax rate is currently 1.75 percent.

“So far, this year, in the three months, they’ve already taken $130,000,” Ghedotte said, noting that Joliet is on pace to lose another $260,000.

The city is also expecting to lose another sum of money through the corporate replacement tax.

Typically, a two percent tax is assessed to corporations, based on their income, and that money goes into a fund to be distributed by the state.

“They diverted about $300,000 of that this year, and that’s about what they did last year,” Ghedotte said. “I don’t anticipate that there will be a change in that revenue, but they continue to divert that money from our fund.”

Ghedotte stressed that those diversions are affecting the city’s revenue and their ability to fund services.

Hales agreed, saying he thinks it’s critical that the City of Joliet invite its local legislators to a future workshop for discussion on how removing local funds to solve some the state’s woes is hurting people at the local level.

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