Sales tax revenue in the Village of Forest Park has declined by about 13 percent in the last four years. But indications are that the local economy may have stabilized and retails sales have started a slow rebound over the last few months.
Village Administrator Tim Gillian said that he’s expecting sales tax revenue of about $4,286,000 in the fiscal year that ended Friday. In fiscal 2007, the Village of Forest Park received sales tax revenue of $4,916,000. That dropped to $4,851,000 in 2008, to $4,524,000 in 2009, and continued to drop over the past 12 months, falling about 9 percent in the last fiscal year.
But Gillian says that he thinks and hopes that this year will be the low watermark for sales tax revenue. He said that economy seems to have stabilized and that while he’s not looking for a dramatic increase in sales tax revenues, he thinks that the declines may be over.
Other nearby communities have also experienced declines in sales tax revenues as local governments have been severely hurt by the poor economy. But Oak Park has seen a smaller drop in sales tax revenue than Forest Park. Oak Park collected a $5.14 million in sales tax revenue, a drop of only 1.15 percent over the figure from 2008. Oak Park’s sales tax revenues were buoyed by an increase in revenue from food sales which reflected the the opening of a Traders Joe’s grocery store.
In other communities, sales tax declines were worse than in Forest Park. In Elmhurst, for example, sales tax revenue fell by nearly 20 percent in 2009.
One local retailer says that she’s seen a rebound in sales over the past the few months, which bodes well for the village’s finances.
“It has picked up a little bit from last year,” said Team Blonde co-owner Jayne Ertel. “I’d say 5 to 10 percent up.”
Sales tax makes up a little more than 20 percent of the village’s annual budget and the drop in sales tax revenue has forced the village to economize, Gillian said.
“Our department heads have had to be smarter,” he told the Review.
Gillian is hoping that when all the numbers are added up, the village government will end up in the black this year despite the drop in sales tax revenue.
“We’re projecting a small surplus,” Gillian said.
Wal-Mart and car dealers are the largest contributors of sales tax to the village.
Last year, Currie Motors lost its Chrysler dealership, which cut into the village’s sales tax revenue.
But auto sales have risen from last year’s low levels and Gillian is hopeful that the village coffers will benefit as a result of that.
Recent national statistics support Gillian’s optimism. Nationwide auto sales increased by 17 percent in April compared with sales one year ago, according to figures from the research firm Autodata reported in the Wall Street Journal.
Gillian also pointed to recent business openings in Forest Park, such as the new tavern Duckfat in the old Horan’s Snug location.