- Associated Press - Tuesday, November 28, 2017

SPRINGFIELD, Ill. (AP) - An Illinois lawmaker has proposed cutting a fee from the state’s budget package that affects local governments, arguing there wasn’t enough time to fully examine it due to the urgency to end the prolonged budget impasse.

The budget package applied a 2 percent collection fee to sales taxes imposed on municipalities for collecting taxes above 6.25 percent. The fee generates about $60 million annually for the state.

Democratic Rep. Anthony DeLuca of Chicago Heights has proposed cutting the fee in half, The State Journal-Register reported.

“I’ve heard from (communities) that it does have a very big impact on them,” DeLuca said. “Where they have a lot of retail in their community, they have a mall, it’s been a very big impact on them.”

Springfield is among the cities affected by the fee with an 8.5 percent sales tax rate. City budget director Bill McCarty said the fee is costing Springfield $840,000 in sales tax revenue that would normally go into city coffers.

“We’re working hard advocating to get this reduced,” McCarty said. “The bottom line is I think we can all agree that there’s no way that it takes $60 million for the Department of Revenue to collect city sales tax. Not when they’re already collecting state sales tax anyway. It’s a surtax on communities to help the state balance its books.”

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