Economic Statistics Reveal Interesting Local Trends

The Village of Libertyville's sales tax revenues have shown a significant decline over the past decade.

In 2010, the village generated $5.6 million in sales tax revenues, down 28 percent compared with 2001, when the village's sales tax revenues were at their peak at $7.8 million, according to numbers provided by Libertyville officials.

In 2006 and 2007, the village collected around $7 million annualy in sales tax revenues. In 2008, however, tax revenues dropped sharply to $6.25 million, a 11 percent decline compared with the previous year.

Drop in Auto Sales

The main reason for the decline was slower automobile sales, which represents a large source of sales tax revenue in the village. After collecting more than $4.8 million from vehicle sales in 2006, that number dropped to $3.1 million by 2009.

"We've seen a sharp drop in revenue from automobile sales," Libertyville Trustee Drew Cullum said during a recent Committee of the Whole/Budget Workshop meeting. "The worst of it seemed to begin around 2008, which coincides with right around the time the recession started."

Mayor Terry Weppler concurred.

"I think the days of everyone driving around in SUV's as a luxury may be gone," Weppler told village board and staff members. "Gas, coupled with the economy, just makes it costs too much for people to be doing that anymore."

There is some good news, however. Since 2009, the declining sales tax revenues appeared to have leveled off a little. 

Sales Tax Revenue Expected to Increase

In 2009, the village collected $5.5 million in sales tax revenue. In 2010, the village collected about $5.6 million from sales tax, according to this year's proposed budget documents.

The upward trajectory is expected to continue.

In the 2011-12 fiscal year, the village is projecting to collect about $5.7 million in sales tax revenues, up about 4 percent compared with the 2010-11 fiscal year budget.

Some highlights from documents provided by the village:

• In 2002, Libertyville received 70 percent of its sales tax revenue from automobile sales. That number declined to 58 percent by 2009.
• The amount of sales tax revenue collected by the village from pharmaceutical/drug sales at places such as Walgreen's nearly doubled over a seven-year period. Libertyville collected 11 percent of its sales tax revenue from pharmaceutical/drug sales in 2009, compared with only 6 percent in 2002.
• In 2002, 8 percent of Libertyville's sales tax revenue came from food sales, compared with 12 percent in 2009. Similarly, 5 percent of the village's salex tax revenue came from restaurants in 2002, compared with 9 percent in 2009.