The Great Recession Squeezes Morton Grove's Budget Tighter

Every year when the Morton Grove trustees get a copy of the budget, on top is a “transmittal letter” hitting the highlights and lowlights of the village’s financial position.

The increasingly desperate tone of those letters in recent years reads like transmissions from the captain of a ship in distress.

"As with other municipalities through the nation, Morton Grove has experienced serious revenue declines," the 2010 letter says, describing that year as a "cutback budget."

"The budgetary challenge of 2011 is to maintain essential service levels while minimizing property tax or other license or fee increases," this year's transmittal letter said.

As the housing bubble burst in late 2006 and the Great Recession set in, small cities all across the country were hit with the same perfect storm: 

• stalled and local taxes on those transactions dried up.
• Retail sales and the taxes they produce dropped precipitously.
• Job cuts and cutbacks led to a reduction in the local share of state income taxes.

But Morton Grove was in a more vulnerable position than some of its neighbors when the recession hit, leading to unprecedented municipal layoffs in 2010 and significant ongoing cuts in public services.

Things have gotten so severe that in this year’s “precariously balanced” budget, in the words of Finance Director Ryan Horne, there is no money for fixing curbs or sidewalks.

There is so little “wiggle room” that if the massive snowstorm that hit the Chicagoland on Feb. 1 and 2 had not been declared a natural disaster (and therefore eligible for federal reimbursement), the cost of the extra rock salt and overtime to run the plows would have sent the budget into the red, Horne said.

Why Was it Worse in Morton Grove?

A combination of past governmental decisions, inherent traits and recent history left Morton Grove more vulnerable to the recession than some of its neighbors.

Just as revenues were beginning to drop off, Morton Grove was hit with rising police and fire pension obligations due in large measure to insufficient contributions in past years.

In 2011, pensions will consume nearly $4 million, or 17.3 percent of the village expenses. That compares with 12.7 percent of expenses in 2007.

Rising pension obligations -- mandated by Springfield to be fully funded -- were given as the sole reason for the first village levy increase in three years this year, of 3.5 percent. The same budget eliminated CPR classes, the senior bus and cut another two positions from the public works department.

When a frenzied housing market spiked real estate transfer taxes, where many cities saw a windfall, Morton Grove saw a life preserver. Still reeling from the village desperately needed those tax dollars and, therefore, felt their loss more acutely.

The village is smaller and more heavily residential than neighboring Glenview, Skokie and Niles, and with fewer commercial and industrial partners to help pay taxes, the local government was already running a lean operation, according to village officials and available data.

Morton Grove as the Most Efficient Northern Suburb

Morton Grove has the most efficient government of the 15 northern suburban communities, according to a Park Ridge survey released in January (which you can access in the media section of this article). Morton Grove was found to spend $1,190 per resident for village services. Glenview, Skokie and Niles spent $2,146, $2,137 and $1,630, respectively.

“We don’t have a lot of programs you would say are luxuries,” said Theresa Hoffman Liston, corporation counsel for the village. “So when we make cuts, they hurt.”

Among the most contentious decisions Mayor Dan Staackmann and the board's six trustees made was to close the Morton Grove Senior Center. After taking a lot of heat, the nonprofit North Shore Senior Center stepped in and agreed to take over operations.

The most significant staff cuts in Village Hall history took place in 2009 and 2010, in addition to several unfilled positions that had been left open to save money.

“Basically we’ve had a hiring freeze since 2001,” Staackmann said.

Among those let go were the village planner, who had been on staff more than 20 years, and whose duties are now done by Community Development Director John Said.

The village also had to fire a longtime secretary to community and economic development, six part-time crossing guards, police support staff, fire inspectors and code inspectors, a part-time nurse, a human resources manager, senior and family services coordinator and administrative assistant, and a civic center facilities manager.

That cut $1.2 million in salaries, according to the 2011 budget.

“It was gut wrenching,” said Liston, who, along with village administrator Joe Wade, went from office to office confirming people’s fears about their jobs.

Shifting Priorities 

Every cut has meant more work for someone still on staff and a shifting of priorities.

For example, in the building department, which has half the budget it did 10 years ago, one full-time and one part-time building code inspectors are trying to do the workload of two full-time and seven part-time inspectors.

Predictably, fewer code enforcement tickets are being written for overgrown lawns, peeling paint and other nuisances. In 2010, 103 tickets were written for code violations as compared with 249 in 2009.

Speaking more generally about cuts to village services, Staackmann had this to say: “There comes a time when you can only cut so much before property values begin to go down on your house.”

While the village tries to grow its way out of the hole by attracting new businesses, Public Works Director Andy DeMonte will continue to drive a snowplow.

His department’s budget is down 45 percent from its 2001 level.

“Nobody is just a truck driver or just a laborer [in Public Works],” DeMonte said. “One day we have a crew cutting down trees and the next day they are shoveling asphalt.”

“I even still plow snow,” he added. “We need the bodies.”

Tomorrow, check back for a look at the budget through a photographer's lens.