SAVANNA – State Representative Tony McCombie (IL-71st) released the following statement in response to the Illinois Department of Revenues Corporate Personal Property Replacement Tax (also known as the ‘replacement tax,’ CPPRT, and PPRT) forecasts:
“Every week we uncover more problems in the superficial budget passed in July. The majority party continues to use the increase of taxes, mandates and now the diversion of PPRT to fund their own priority projects, which will have a devastating effect on local communities. The Department of Revenue just released its FY18 PPRT estimates and the effects are astounding. Included in the forecast was a reduction of $6 million to our local school districts and an additional reduction of $4 million to our local units of government,” said Rep. McCombie. “The majority claims they want to hold our schools harmless, however they just played a major part in taking $10 million from local schools and government entities.”
According to the Illinois Dept. of Revenue, “Replacement taxes are revenues collected by the state of Illinois and paid to local governments to replace money that was lost by local governments when their powers to impose personal property taxes on corporations, partnerships, and other business entities were taken away.”
Embedded in the budget’s spending plan (SB6) was a reallocation of money in PPRT to the tune of $297 million, $122 million of which are new diversions. In total, the FY18 replacement tax allocations are estimated at $1.12 billion. This represents a 23.8% decrease from the FY17 allocations that totaled $1.47 billion.
PPRT funds are intended to go to local school districts, counties, townships, fire departments, police departments, park districts, hospitals and various other local bodies. “This budget reflects an ever-increasing list of non-essential items that is impossible to balance without reforms to our structure or reforms to our spending. We have to stop the practice of sweeping money from our pensions, other funds and away from the people of Illinois.”