Quinn's Latest Plan Could Result in a $700,000 Loss for Algonquin

Quinn’s latest attempt to dig Illinois out of a fiscal hole may result in a $700,000 loss this year for the village of Algonquin.

Gov. Pat Quinn is proposing to cut up to 30 percent of the money the state allocates to local municipalities in state income tax revenue if lawmakers won’t let him borrow billions of dollars to pay overdue bills.

According to Illinois Statehouse News, Quinn has floated a new way to pay off $4.5 billion the state owes to schools, social service providers, doctors and others. The plan would suspend paying municipalities part of the Local Government Distributive Fund (LGDF), a cut of many state taxes.

The village of Algonquin receives $2.3 million annually in monthly LGDF payments. A 30 percent cut to those payments would result in a $700,000 loss for the village, or about 4 percent of its general funds, said Village Manager Bill Ganek.

“For now we are working on developing a contingency plan until this know if this is a reality,” Ganek said.

Ganek said that it won’t be easy to make cuts to an already-lean budget, and for now it is too premature to know whether a cut in state funds would result in job losses.

In the 2011-12 budget, 82 percent of the $18.2 million in general funds was allocated to the public works and the police departments. Since those departments receive the largest share of funds, Ganek said they may be the first to see cuts, if cuts are needed.

In a Chicago Tribune article, Quinn’s budget director David Vaught said mayors and other community leaders should "come help us get the debt restructured, and then you would get paid. That's the message to them. It's not, it's not a hostile message. … We have a cash crunch here, and we need your help getting out of it."

Village President John Schmitt announced on Tuesday’s committee of the whole meeting that he would be going down to the state capitol with the Illinois Municipal League to present their case and make a point as a group.

While lawmakers are trying to put together next year's budget by the May 31 deadline, Illinois is expected to end its yearly budget with an $8 billion deficit.

If the payments are halted, the suspension could be retroactive to February and last until the end of the year.

Ganek said that the state is already three months behind on its payments to the village.

In a LITH Patch article, ," but not as much as the governor is proposing.