SPRINGFIELD -- Even before Gov. Pat Quinn formally unveils his spending plan Wednesday, local government officials have been gearing up for a fight.

Over the weekend, Quinn's budget chief, David Vaught, said the governor will outline a controversial plan to cut the amount of income tax revenue the state shares with municipalities in his budget plan for the fiscal year beginning July 1.

The state would use the estimated $300 million to help close a gaping budget hole. But, cash-strapped cities and towns say they need that money too.

Normal Mayor Chris Koos said the town could lose up to $400,000 at a time when officials already have cut workers, halted new programs and increased the local sales tax to cope with current budget shortfalls.

Lincoln Mayor Keith Snyder suggested his community would face additional belt-tightening.

"Any loss of additional revenue would require further cuts," Snyder said.

While some mayors wouldn't speculate on how exactly they would deal with cuts in state aid, Pana Mayor Steven Sipes said his town may need to look into some kind of tax or fee increase to plug such a shortfall.

Because Pana's property taxes are capped, city officials would have to consider water rate hikes or utility tax increases if more revenue is needed, he said. Layoffs are an absolute last resort because the town of 6,000 only has 45 employees.

"It's going to be devastating," Sipes said.

Vandalia Mayor Ricky Gottman would not say whether layoffs or tax increases would be necessary if the state cuts funding for municipalities, but both are last resorts.

"We cut the budget pretty deep this year," Gottman said.

School districts also are in Quinn's fiscal crosshairs. Vaught told the Associated Press that 17,000 school employees could be laid off under the governor's budget proposal.

Ray Bergles, superintendent of the Silvis school district near the Quad Cities, said the state is already inconsistent in paying bills.

"We're not getting money now anyway," said Bergles.

Even without action by Quinn, Silvis is cutting 10 teachers and six other workers in the coming school year. The district also is cutting back on buying new school supplies and may have to increase class sizes.

The district, however, will not likely increase property taxes, Bergles said.

At the Du Quoin school district in southern Illinois, Superintendent Gary Kelly said the cuts being proposed by Quinn could result in layoffs because reducing spending in other areas likely won't be enough to cover the gap.

"It's the worst financial time for K-12 education we've had in a very long time," Kelly said.

State Sen. Gary Forby, D-Benton, says he expects local governments to lay off workers and cut programs before raising taxes.

"Property taxes probably aren't going to be increased in my district," Forby said.

The governor's budget speech is set for noon Wednesday.