Mayors warn of ‘devastating’ consequences if Rauner cuts state funding in half

Belleville Mayor Mark Eckert and mayors from 10 other metro-east cities sent a message Wednesday to Gov. Bruce Rauner: proposed cuts in state funding would be “devastating” for local budgets.

The mayors gathered during a news conference at the Belleville City Hall to show their unity.

“These proposed cuts that are facing cities at this time could be very, very devastating,” Eckert said. “We know that our state truly has some severe financial problems and challenges, we don’t deny that. We don’t deny that some tough decisions have to be made.”

“We want to work with Springfield but these problems cannot be balanced on the backs of cities. We have too much that we are responsible for every day.”

Rauner, in his first budget address, called for local governments to tighten their belts, and proposed a 50 percent cut in the Local Government Distributive Fund, the state income tax transfers to municipalities, to help close the state’s $6 billion budget gap for the upcoming fiscal year.

“The governor has asked local communities to help him pass the Turnaround Agenda to help restructure state government, which will make it more efficient and free up resources so reductions do not have to be as drastic,” Rauner spokeswoman Catherine Kelly said in statement released in response to the mayors’ news conference.

“Years of irresponsible budgeting and insider deals have left Illinois with a $6 billion budget hole, and without structural reform, difficult decisions had to be made to get Illinois back on sound financial footing. The amount of money transferred to local governments has ballooned by 42 percent in the last decade and the reduction to local governments proposed in the budget puts Illinois in line with neighboring states.”

If the 50 percent cut would be approved by state lawmakers, it would take effect in July and Belleville would lose $2.2 million in funding, according to the Illinois Municipal League.

Eckert said the city possibly would have to close a fire station, lay off police officers and public works employees and possibly raise property taxes if the 50 percent cut took place. He said the city eliminated 20 positions and established a one-quarter percent sales tax to balance the city’s budget in the wake of the recession and state funding cuts. The additional sales tax is slated to end in 2017.

“Right now, with all these proposed cuts, I would say I don’t see a choice we have but to keep the quarter percent in place,” Eckert said. “As far as doing any more than that, I haven’t envisioned that yet. It just depends on how devastating the state cuts are.”

Rauner has said that local governments around the state have more than $15 billion in cash reserves.

But the local mayors particularly oppose using these reserves for covering state funding cuts.

“We cannot spend our reserves on these cuts because if we spend our reserves, we can’t make improvements anywhere else and that’s the problem,” Smithton Mayor Ray Klein said. “He expects us to take our reserves. We’ve tightened our belts.”

Klein noted that Smithton recently took $400,000 out of reserves to pay for a water line project.

Eckert said taking money out of reserves can hurt a city’s bond rating, which increases the cost of borrowing for municipalities.

Rauner’s “Turnaround Illinois Agenda” calls for looking at “unfunded mandates.”

These types of mandates were cited by the area mayors as something they would like to get rid of but Mascoutah Mayor Gerald Daugherty said even if all of the estimated 235 mandates were removed, the savings would not make up for the funding cuts proposed by Rauner.

Columbia Mayor Kevin Hutchinson said an example of an unfunded mandate is state directives on pension funding.

“They have put together a pension fund that is unsustainable. In the city of Columbia, our pension fund adds up to roughly half a million dollars. For a small town just under 10,000 people, that is a very large number for us to deal with.”

“We’re willing to sit down with legislators and work through this but over the years these unfunded mandates continue to cripple cities without us having any real say so into how they’re shifting the burden of payment on certain issues to municipalities.”

Daugherty, who was elected president of the Illinois Municipal League last year, said he and other league members recently met with Rauner.

“He wants us to get behind him and support” his Turnaround Agenda, Daughtery said. “He made no commitment and we made no commitment either. In a lot of ways it was the beginning of the discussion with our group. It’s all about working together. We are trying to work with him.”

The local mayors hope to meet with Rauner, who they said may visit the metro-east early next month.

Cities currently receive 8 percent of the total state income tax revenues, down from 10 percent as recently as 2010, the municipal league said.

Other mayors who attended the news conference were Alton Mayor Brant Walker, Breese Mayor Charles Hilmes, Collinsville Mayor John Miller, Godfrey Mayor Mike McCormick, New Athens Mayor Richard Klein, Red Bud Mayor Tim Lowry and Waterloo Mayor Tom Smith.