Rock Island Today

Dixon Mayor Li Arellano says Illinois is now taking from Peter to pay Peter.

In approving the state's new $36.1 billion state budget, Arellano says the General Assembly included a 2 percent "collection" tax that it takes from municipalities before they can get their sales tax revenue.

“They’re taxing us to give us our own tax money,” Arellano told the Rock Island Today. “This 2 percent processing fee just shows those in Springfield found a lot more ways to grab your money.”

Arellano estimates that Dixon’s cost to the state for getting its hands on its own sales tax bounty will be approximately $20,000 annually. Other municipalities could see much higher fees, depending on individual community sales taxes.

Drawing Arellano’s ire all the more is his argument that the largest permanent tax hike in state history — 32 percent — came with no reforms, nor did it address the $15 billion the state still carries in unpaid bills.

The new spending plan, enacted after lawmakers voted to override a veto by Gov. Bruce Rauner, pushes personal income tax rates to 4.95 percent from 3.75 percent and corporate income tax rates to 7 percent from 5.25 percent.

“This pattern of deferring structural reforms is mind-boggling,” Arellano said. “This time, there was no talk about pressing matters like the prevailing wage. And we still have to address long-term issues like pension reforms. With the way things are trending, you may soon be seeing things like infrastructure taxes.”

While Arellano acknowledged being happy that the end of the state’s two-year budget stalemate will finally pave the way for nonprofits and social programs to get the funding they desperately need, he lamented seeing politicians again essentially kicking the can down the road.

“You saw two sides that couldn’t reach compromise, and Democrats were willing to wait out the siege longer,” he said. “Someone had to cave, and with the way it happened, it came with no reforms.”