Steady climb keeps Chicago atop Illinois' income-tax sharing fund

Chicago's slice of the Illinois income tax has grown a great deal over the past decade. It has not grown any faster than everyone else's.

The city received $488.1 million through the state's Local Government Distributive Fund in fiscal 2025, up 76.5% from fiscal 2015, according to state payment records for the fund. That gain is large in dollars, but it lands close to the middle of the pack among the state's largest recipients.

City Hall is heading into another fall budget season, and pressure on local budgets is building. For residents, that makes this a practical question: how much of the city's money comes from state income-tax sharing, and has that stream kept up?

How much money reaches the city?

The fund is a designated portion of state income-tax revenue that municipalities and counties receive on a per capita basis (iml.org). In fiscal 2025 it paid out $2.3 billion to local governments across Illinois, and Chicago ranked first among all of them.

Back in fiscal 2015, the city's check was $276.5 million. The climb since then works out to an average of 5.8% a year, compounded. These are nominal dollars, not adjusted for inflation, so part of the increase reflects rising prices rather than added buying power.

Did Chicago gain ground on the rest of Illinois?

Not by much. Among the largest recipients, a group that includes counties and other units of government as well as cities and villages, the median increase over the same years was 74.6%. Chicago's gain ranked 11th in that group by growth, just a shade above the midpoint.

Its share of the statewide pot barely moved. Chicago took 21% of all payouts in fiscal 2015 and 21.4% in fiscal 2025.

For a household in North Center or out near O'Hare, that means the city's income-tax money has risen alongside everyone else's in Illinois, from the collar counties to downstate, rather than pulling ahead.

A smaller cut than the fund once had

The fund itself claims a smaller share of state income-tax collections than it once did. Until 2011, local governments received a larger portion of total income-tax collections than the share they get today (iml.org).

The Illinois Municipal League says fully funding state shared revenue and restoring the fund to its historic rate is a top legislative priority (iml.org). Any such change would have to come from lawmakers in Springfield.

Until then, Chicago remains the fund's biggest customer by a wide margin. As the mayor and aldermen start weighing next year's budget, the city's portion sits at 21.4% of the pot, about where it stood a decade earlier.

About the data

We used state records of Local Government Distributive Fund payments by recipient, refreshed in March 2026, and compared each recipient's fiscal 2015 and fiscal 2025 receipts in nominal dollars. Chicago's growth was compared with the median percent change among the largest recipients by fiscal 2025 receipts, a group that includes counties and other units of government as well as municipalities.

• All dollar figures are nominal and are not adjusted for inflation, so growth overstates the change in buying power.
• The comparison group of largest recipients includes counties and other governments, not only cities and villages.
• The payment data shows how much each government received, not how large a share of its total budget that money represents.

Local Government Distributive Fund: the pool through which Illinois shares a portion of its state income-tax revenue with cities, villages and counties, divided by population. Fiscal year: the yearly budget period the state uses to record payments, which does not match the calendar year. Median: the middle value when all recipients' growth rates are lined up from lowest to highest.

Sources

• The publisher's Socrata open-data portal (named with each dataset): Illinois Income Tax LGDF, latest period 2026-03-13, released March 13, 2026; retrieved Oct. 19, 2026. Data