CHICAGO (May 6, 2026) — When taxpayers think about how Illinois distributes the hard-earned income taxes they pay, few realize that the Local Government Distributive Fund (LGDF) is what helps keep our communities running, funding essential services like safe roads, first responders, and local programs families rely on every day.

While the history is long, the short description of LGDF is the mechanism that the state uses to distribute a portion of income tax collections – calculated based on the number of residents – to counties, cities and town governments. These funds get used for repairing roads, mental health services, public safety programs, support for small businesses, and pensions for first responders. LGDF distributions have also long helped keep local property taxes in check. When the LGDF was created in 1970, ten percent of all state income tax revenue was set aside for local governments. Since the 1970s, the percentage has fluctuated and today sits at 6.47 percent. In this year’s budget address, the Governor proposed reducing it to 6.23 percent.

As a percentage-based model, the fund grows or shrinks according to annual state revenue collections. But as state collections have risen, the amount distributed has remained relatively flat. The Governor’s proposed reduction from 6.47% to 6.23% is an estimated $60 million loss to local governments. At the same time the cost of local government operations has increased steadily with inflation. The unfortunate result is that these much-needed funds have not kept up with the costs to deliver critical services.

What concerns leaders of local governments are projections that show a troubling trend downward. Newer sources of revenue that feed into the LGDF like adult use cannabis tax are down over 5%. Equally concerning, the total per capita distributions are projected to drop over 4% for FY26. (source IML.org)

We recognize that our state is facing significant challenges due to reductions in federal funding and evolving conditions in our communities. Throughout this time, leaders in Springfield have taken steps to address these issues, and we acknowledge those efforts.

As the budget process moves forward, it is with a unified voice and in the spirit of partnership that we ask our partners in the General Assembly and Governor Pritzker to reverse the trend and increase LGDF funding.

The strength of our state’s economy is derived from the foundation that local government services provide. The responsibility of local governments to support first responders, workers, and residents of all ages must remain at the forefront of critical revenue-sharing decisions.

As always, we are committed to working alongside elected officials at all levels of government to meet this crucial moment and deliver for our taxpayers.

Mayor John D. Noak, Chair
Village of Romeoville

Mayor Donald J. “Donny” Schmit, Jr., 2nd Vice-Chair
Village of Fox Lake

President Richard P. Reinbold, Secretary
Village of Richton Park

Mayor Brandon Johnson, 1st Vice-Chair
City of Chicago

Mark R. Kownick, Treasurer
Village of Cary 

Mayor Nancy R. Rotering, Immediate Past Chair
City of Highland Park

About the Metropolitan Mayors Caucus

Founded in 1997, the Metropolitan Mayors Caucus brings together Mayors and Village and Town Presidents of the Chicago region to work on issues of regional significance through the City of Chicago, DuPage Mayors and Managers Conference, Lake County Municipal League, McHenry County Council of Governments, Metro West Council of Governments, Northwest Municipal Conference, South Suburban Mayors and Managers Association, Southwest Conference of Mayors, West Central Municipal Conference and Will County Governmental League. Combined they represent 275 municipalities and a population of over 9 million residents.