Local governments face 15% hit in replacement tax funds
Illinois’ local governments face a reduction of nearly 15 percent in personal property replacement tax money distributed by the state.
The Department of Revenue said the amount of replacement tax money available in the current budget year will be $1.054 billion -- down $182 million from last year -- to be split by more than 6,500 local governments around the state.
That means local governments that receive those funds will get 14.7 percent less than in 2011.
During budget battles with Gov. Pat Quinn, Illinois lawmakers chose to pay regional school superintendents out of replacement tax revenues rather than general state revenues. That reduced the amount distributed to local governments by about $12 million.
Only businesses pay personal property replacement taxes.
Revenue spokeswoman Sue Hofer told the State Journal-Register that the new reduction is mainly because the state did not make refunds owed to personal property replacement taxpayers during the state’s 2010 and 2011 budget years. That meant local governments received more money than they should have if the refunds had been paid.
The state caught up with business tax refunds during the 2012 fiscal year, resulting in the $182 million reduction in replacement tax money being distributed to local governments now.
“In short, local governments received monies in prior years that now must be repaid,” according to the department web site.