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Libertyville reports big boost in sales tax revenue

Preliminary work on the next village budget has yielded a $1.1 million surprise for Libertyville officials.

That's how much more-than-expected sales tax revenue the village estimates it will receive by April 30, the end of the current budget year.

For the first seven months of the current budget year, the village has received $4.5 million in sales tax, up $828,000 from the same period last year.

“We're about 22 percent above last year,” said Pat Wesolowski, village finance director.

“It looks like most of it is due to vehicle sales.”

The pace of increased sales through November led Wesolowski to revise expected sales tax returns for the current budget year to $7.46 million from the current budget of $6.37 million.

A surge in restaurants and the opening of a Trader Joe's grocery store also has contributed to sales increases in the food and drinking and eating places categories, according figures provided to the village board.

Sales tax revenue has increased by about $1 million the past five years, but still is well below the peak of $8 million in 2001.

Sales tax revenue, which covers about 25 percent of the day-to-day expenses, bottomed out at $5.4 million in 2009-10. The overall 2014-15 budget is $24 million.

“I think there were increases across the board, but certainly the cars and restaurants are significant categories,” said Heather Rowe, economic development coordinator. “All of our groceries have seen increased sales but we also added Trader Joe's to that category,

Rowe said the bump could be partially because of an improvement in the economy, but also because more customers for various products are coming to town.

With 13 dealerships, auto sales remain the bread and butter for sales tax revenue.

“My sales are up 30 percent from a year ago,” said Glenn Bockwinkle, general manager at Acura of Libertyville and head of the Libertyville Mile of Cars marketing consortium. “Plus, my used cars (sales) are up substantially from a year ago.”

Bockwinkle said all dealers in town are doing well this year.

Customers are feeling better about the economy and the average age of a car has increased from eight years at the start of the economic downturn to 11.5 years and vehicles are wearing out, he said.

What will be done with the windfall will be determined as the budget process continues.

Options include putting it into reserves, using it for capital projects, adding to pension contributions or reducing a utility tax, for example.

Wesolowski is cautious about the sales tax spurt and is not projecting an increase for 2015-16.

“It doesn't seem like that growth is sustainable, so we left it flat,” she said.

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