Morton Grove's Double Dip Recession

For the first time in four years, the 2011 Village budget is balanced.

But it is only “precariously” so, according to Finance Director Ryan Horne. Many departments are gutted, other positions remain unfilled, and services are pared back to the point that public works isn’t going to fix curbs or sidewalks this year.

Morton Grove is in a particularly bleak financial position because the recession has already been a “double dip,” stretching back 10 years for the Village. That’s when the electronics retailer Abt left for Glenview, taking 30 percent of its sales tax dollars and a full 10 percent of all revenue. In addition, pension obligations for the fire and police departments have skyrocketed in recent years as the village plays catch-up for years it did not made adequate contributions, according to village officials.

Check out the attached graph to see the Village's sales tax for the past decade. 

So while Morton Grove had its own economic challenges in the early 2000s, this was only compounded by the housing crash and Great Recession later in the decade. All local governments took a hit in all four of the major revenue streams for municipalities:

• Sales taxes are down because people aren’t shopping.
• Property taxes are down because home values have plummeted and foreclosures are up.
• Real estate transfer taxes have plunged because homes aren’t selling.
• In a jobless recovery, the local share of state income taxes are off, with the state legislature weighing a plan to pull back even more.

Over the next five days we take a look at the financials of Morton Grove and explain how things got to this point; what the village is trying to do about it; and examine a new threat: State plans to reduce the local share of income tax.