It is certainly no secret that many states across the country are struggling financially. Public pension burdens can be staggering, costs of providing education and Medicaid continue to rise, and legislators are scrapping to find solutions. The state of Illinois, home of TheGrantHelpers.com, is a prime example of this phenomenon. Right now, the Illinois State Legislature is considering two areas that specifically affect municipal revenue:
1. Local Government Distributive Funds (LGDF)
When the state passed the income tax increase several years ago, municipalities suffered a reduction in their share of this revenue stream, which fell to 6% of the tax from 10%. In the FY2014 budget, Gov. Quinn is proposing to decrease this percentage even further, which could result in a $240 million reduction in funds to municipalities, translating to approximately $11.50 per capita, according to the Illinois Municipal League.
2. Local Property Tax Revenue
In response to falling home prices, legislators are considering various new restrictions on increases in property taxes that fund municipal services: “...the different measures all have roughly the same goal: to prohibit school districts, park boards, municipalities, and other taxing bodies from increasing tax levies when home values are dropping.” Source: Illinois Legislators Want Property Tax Freeze, Posted February 27, 2013, By Dennis Rodkin on Chicagomag.com.
These two areas can represent 25% or more of revenues in many municipalities. Cutbacks in Illinois and several other states seem inevitable due to current economic factors.
One area that municipalities may turn to in alleviating these financial struggles is grant funding, particularly for capital projects. Securing federal grants for major projects can ease the operating burden on the municipal entity, while improving the quality of life for its citizens. Grants may also be used to increase the attractiveness of a community for economic development. Businesses may be more likely to locate in municipalities with updated amenities. Effort invested in securing economic development assistance grants can result in new business, which leads to increased sales tax and property tax revenue for municipalities.
In an effort to help municipalities become aware of the multitude of grants that are available, The Grant Helper’s blog has and will feature several opportunities for rural and urban cities. One such blog we have recently posted, Municipal Water and Wastewater Grants, features six different grant opportunities to improve or construct water and wastewater systems. On April 9, check back to our blog for a list of business and economic development grants available for municipalities. Subscribe to our blog to get a notification when we post new topics.
TheGrantHelpers.com can help in several key areas, with funding searches across multiple types of databases, overall grant strategy assistance, help with any one specific proposal, and many other services. To strengthen your approach, contact us today. Our initial advice and consultations are always free.
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