State bill drawing fire from local governments

By Denise Jackson

May 16, 2012 Updated May 16, 2012 at 6:25 PM CDT

PEORIA, Ill. -- A proposed bill to divert more than one billion dollars from local governments to help fund the state pension system is drawing fire from Peoria city leaders.

Wednesday afternoon the amendments to the house bill were pulled off the table in Springfield, but they are likely to return in some form.

Peoria Mayor Jim Ardis says the city gets $6.5 million from the state each year under the corporate personal property replacement tax. He says, if the state takes away the money, the city might be forced to layoff firefighters and police officers, putting public safety at risk.

"Approximately 44 police officers or 48 fire department personnel. So you cannot do without that type of number of public safety," said Mayor Ardis. "Cities did not get a dime of the corporate tax that Springfield put in last year and not only did we not get any of that now they're coming after this portion of our corporate taxes as well."

The amendments to the house bill call for tapping into the 2.5 percent tax on corporations. That could take away more than a billion dollars from cities and towns to help pay for the state's under funded teacher retirement program.

Peoria District 150 Superintendent Grenita Lathan says the proposal could potentially boost the deficit by several million dollars

"You're talking about $1.9 million deficit now that could go all the way up to $10 to $15 million," said Lathan. "How do you cover that and know school is gonna open in three months?"

Some argue that the proposal would also drive up property taxes, something Mayor Ardis and others don't want to see happen.

"Times are tough and Peoria's closed over $40 million in deficit over the last four years and we've done it the hard way and we expect Springfield to do the same thing," Ardis said.

With ongoing budget negotiations it is unclear what kinds of changes will now be made and you can bet local officials are keeping a close watch.