By: NATALIE MORRIS
Source: http://www.sj-r.com
Category: Small Business Grants
The village of Divernon, 15 miles south of Springfield, seemed to be weathering the nation’s economic storm just fine until 18 months ago, when “Closed” signs started popping up around the business district.
Not long after, “For Sale” signs began dotting residential lawns.
“We were pretty fortunate until the last year and a half,” Mayor Randy Rhodes said. “We’ve lost a couple restaurants down on the square. There are three spots for bars, but we’ve only got two. At the entrance to town, both gas stations are closed.
“New things are opening, but they’re not lasting long.”
For small towns with limited tax bases, the loss of a single business or a school can be a nearly fatal blow. Add in a weak economy and the budget problems being experienced by state and county governments, and the struggle for these communities intensifies.
Hamstringing small towns that are poised for growth is a lack of money to make needed infrastructure improvements.
Larry Frang, executive director of the Illinois Municipal League, said roughly half the state’s towns have populations of 5,000 or fewer. While the current economy requires all communities to do more with less, small towns are hit hard because they often lack a strong business district from which to draw sales tax.
Municipalities’ portion of income tax, motor fuel tax and use tax are projected to be $110.55 per resident annually for the upcoming operating year. That’s down from $116.35 two years ago.
“You have less money to spend for more expensive projects,” Frang said. “All (these small communities) can do is keep trying their best.”
Economist Norman Walzer of Northern Illinois University’s Center for Governmental Studies has been studying rural communities for decades. He said the nation’s economic dip sped up a process that has been under way for decades.
“You’ve seen an erosion of the economic basis as regional shopping centers concentrated businesses at a regional level. Smaller communities lost their downtown. Farming has undergone similar consolidation with a focus away from livestock and going to row crops,” Walzer said. “It’s an erosion of the economic base, which led to population loss.
“The recession is just exacerbating it.”
Divernon
Rhodes — a Divernon native who also serves as fire chief for the village’s volunteer department — has worked in Springfield as a Capitol Police investigator for the past six years.
But his heart remains in his hometown. That’s why he makes the daily commute to Springfield, rather than relocate.
Source: http://www.sj-r.com/top-stories/x586040752/Small-towns-vulnerable-to-recession-late-state-payments
