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Your Tax Dollars

February 20, 2026

Your Tax Dollars LGDF IS A SUCCESSFUL FUNDING PARTNERSHIP The Local Government Distributive Fund (LGDF) is a designated portion of state income tax revenues. Cities and counties currently receive a percentage of total state income tax revenues through this fund on a per capita basis. REDUCTIONS IN LGDF CONTINUE Until January 2011, 10% of total income tax collections was dedicated to LGDF for distribution to municipalities and counties. The percentage share of state income tax revenue was reduced from 10% to 6% following the enactment of the temporary income tax increase in 2011. The percentage share of state income tax revenue subsequently increased to 8% when the higher income tax rates declined in January 2015, based upon the schedule established by the temporary income tax law. In July 2017, the income tax was permanently increased, and the local government share was reduced to 5.45% of individual income tax collections and 6.16% of corporate income tax collections for State Fiscal Year (SFY) 2018. For SFY 2021 and 2022, the local government share was 6.06% of individual income tax collections and, 6.845% of corporate income tax collections. In SFY 2023, the General Assembly increased the local government share to 6.16% of individual income tax collections and to 6.47% in SFY 2024. The SFY 2025 and SFY 2026 rates remained the same for both the individual income tax (6.47%) and the corporate income tax (6.845%). Governor JB Pritzker is proposing a reduction in the Local Government Distributive Fund (LGDF) formula, from 6.47% to 6.28% of individual income taxes. “Any reduction in shared revenues results in a direct cost increase to residents – this means property tax increases, sales tax increases or any number of other local tax increases to make up the difference. Any discussion about affordability has to recognize that cuts from the state to local governments actually impact the residents negatively – this doesn’t help affordability on any level. It should be noted that the income tax increases of 2011 and 2017 did not increase revenues for local governments because the state reduced the local share percentage and kept 100% of the additional revenues raised through higher taxes. ILLINOIS MUNICIPAL LEAGUE 500 East Capitol Avenue | P.O. Box 5180 | Springfield, IL 62705-5180 | Ph: 217.525.1220 | Fx: 217.525.7438 | iml.org Illinois Municipal League | LGDF August 13, 2025 Illinois Municipal League | Brad Cole, CEO | Statement February 18, 2026