Issues and Concerns
of Small Town Officials in Illinois
By NORMAN WALZER and SHAWNELLE MARTIN

Issues and Concerns of Small Town Officials
Rural American and small towns, in general, have been subjects of much concern in recent years as a long-term trend of poor farm commodity prices and population out-migration adversely affected many small town economies. While Illinois is among the highest in proportion of population under municipal jurisdiction, it also has nearly 700 communities with populations less than 1,000. Urban areas such as DuPage County, Naperville, Champaign-Urbana, and Bloomington-Normal are prospering, but many other areas throughout Illinois face economic stagnation or decline.

National concern about small town economies was manifested by the recent publication The State of the Small City issued by the National League of Cities. Within Illinois, the Governor's Task Force on the Future of Rural Illinois heard testimony from numerous mayors and officials of small towns and local governments in rural areas. In response to this concern, the Illinois Institute for Rural Affairs, in cooperation with the Illinois Municipal League, conducted a mail survey of mayors in Illinois cities with populations less than 25,000 in fall 1987. This article is the first of several that report the findings of that survey.

The NLC report on the state of the small city, focusing on cities smaller than 50,000, indicated three major issues of concern to respondents:

Federal mandates imposed on cities and towns, without accompanying funds to cover the costs, continue to cause serious problems for cities and towns. Legal liability issues remain serious problems for small communities.

While many small cities and towns were hard hit by the loss of General Revenue Sharing, they continue to provide a broad range of basic services to their citizens, but often at reduced levels.¹

Major differences might be expected in the types and severity of concerns faced by public officials in cities less than 50,000. Specifically in Illinois, only 20 of the more than 1270 cities are larger than 50,000.

The current survey covered several major issues: population and economic trends, provision of services, and general assessment of issues facing local officials. A total of 299 usable responses were obtained. This response rate of approximately 25 percent was not unexpected due to the relatively large number of very small cities, usually without full-time officials. A comparison of cities responding to the survey with the state population distribution revealed a close correspondence. A full tabulation of the findings will be published in a later report.

Issues and Concerns
Examining issues in small Illinois cities misses some interesting hurdles. First is that small cities adjacent to major metropolitan areas face different issues and in different severity from those communities in more remote areas. In large metropolitan areas, there is a spillover of residents into surrounding small towns seeking lower cost housing, relief from congestion, lower taxes, and other factors. For these benefits, residents are willing to drive 20 miles or more to work in larger areas. Alternatively, there may be a shortage of housing in the price range that some workers can afford in the larger cities. Thus, small communities in the hinterland may need water/sewer expansion and additional revenues to support growth in other services. On the other side, the tax base may also increase with new construction.

In more remote areas, however, small towns face other concerns. Business closings, aging populations, population losses, and general economic declines are more common. Local public officials face shrinking tax bases, educational institutions experience declines in tax base, and a loss of traditional businesses such as farm implement dealerships mean that farmers no longer purchase in small neighboring communities.

The issues also differ by population size. Very small communities traditionally provided a few basic services such as banks, grocery stores, farm implements and parts, entertainment, and general merchandise. Many of these businesses have closed in recent years leaving communities with very little to attract custo-

°The authors are professor of economics and interim director, Illinois Institute for Rural Affairs at Western Illinois University and graduate student in the Department of Economics at Western, Financial support for this project was provided by the WIU University Research Council. The authors thank the Illinois Municipal League for its assistance in the data gathering effort.

May 1988 / Illinois Municipal Review / Page 5

Table 1. MUNICIPAL CONCERNS

Mean ranking of the following issues: (1=pressing, 2=serious, 3=not serious)

	Population
Issue	Total	<2500	2501-5000	>5001
Ability to attract industry	1.81	1.87	1.66	1.74
Loss of general revenue sharing	1.88	1.87	1.83	1.95
Liability insurance	1.92	1.98	1.73	1.92
State mandates	1.98	1.98	1.91	2.02
Federal/State regulations	1.99	2.00	1.98	1.98
Overall economic climate	2.03	2.01	2.09	2.07
Unemployment	2.06	1.99	2.07	2.30
Worker's compensation	2.15	2.26	1.90	2.07
Small business closings/farm foreclosures	2.16	2.05	2.16	2.46
Insufficient revenues even at rate maximum	2.16	2.18	2.07	2.18
Loss of youth	2.24	2.17	2.32	2.33
Streets, roads and sidewalks	2.24	2.26	2.39	2.07
Sewerage treatment system	2.27	2.22	2.28	2.47
Loss of employment in city	2.29	2.28	2.10	2.47
Declining city economic base	2.29	2.26	2.12	2.47
Declining property tax bases	2.30	2.26	2.21	2.53
Water distribution system	2.31	2.34	2.14	2.40
Inadequate police protection	2.66	2.61	2.72	2.78
Increased crime	2.70	2.73	2.63	2.67
Bridges	2.74	2.74	2.75	2.73
Collective bargaining	2.80	2.92	2.95	2.41
Access to hospital care	2.80	2.78	2.80	2.87
Access to doctors	2.80	2.76	2.88	2.88
Inadequate fire protection	2.81	2.77	2.88	2.90
Access to ambulance service	2.84	2.80	2.86	2.93

mers. This is especially true if the community is not located on a well-traveled highway.

Medium-size communities are better able to compete for customers and often attract discount stores or small shopping centers. These retailing activities are important in stabilizing local economies and financing public services. The important point is that location within the state and population size may affect the importance of issues facing municipal officials in small communities.

Respondents were asked to rank each of the potential concerns as either "very pressing, serious but not major, or not a serious problem." The tabulations of mayor's responses, by size of community, are presented in Table 1 in order of importance, where a larger number indicates greater importance.

Inability to attract industry is the most important concern facing small communities responding to the survey. This finding holds, regardless of city size. The statewide average response of 1.81 places this concern between "very pressing" and "serious but not pressing." The responses, compared by community size, indicate that cities larger than 2,500 viewed inability to attract industry, as substantially more important than other concerns.

Loss of general revenue sharing ranked second in importance by relatively larger cities but was tied with inability to attract industry in the smallest group. General revenue sharing was eliminated in 1987 after several years of relatively constant allocations. The funds were particularly attractive to municipalities because there were virtually no strings attached use of funds, they required no application process, and did

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not involve any match. Public officials were able to initiate much needed one-time projects without raising taxes. Many of the projects funded with general revenue sharing were capital projects and, in a few years, local public officials will probably feel even greater pressures for street and sewer repairs or other expensive public works projects.

Obtaining liability insurance at an affordable cost has been a major issue plaguing public officials in Illinois and nationally. In many instances, city policies have been dropped by insurance policies, and in others, the premiums have become so high that public agencies have discontinued insurance. This concern was rated third in importance, statewide, by respondents to the survey but was ranked second in importance by communities larger than 5,000.

State mandates ranked fourth in all but those communities larger than 5,000 residents where federal/state regulations and liability insurance ranked above mandates. It is difficult to separate federal/state regulations from state mandates because both may impose costs on local governments without additional resources. The mandates question has been a concern of municipal officials for many years, particularly where pensions are involved. The General Assembly passed legislation requiring reimbursement for mandated programs, subect to stated exclusions and exemptions, but there has been a history of disagreement regarding which legislation is covered and what the reimbursement should have been.

Space does not permit a detailed examination of all the issues in Table 1. Most are familiar to municipal officials and to public policy-makers statewide. One of the surprises of this project is the relative similarity among cities by size. It may be that, in Illinois, problems are similar because of the fairly narrow size distribution of cities responding to the survey. Other surveys in earlier years have been reported for larger cities using different problem statements.² Updates of these efforts are currently underway.

Also unexpected is the relatively low ranking assigned to access to hospital care, doctors, and ambulance services. Nationally, one reads about deterioration in medical services in small communities as hospitals close and medical practitioners leave rural areas. At least in the communities responding to the survey, policy-makers apparently perceive that residents can travel to nearby larger communities for health care.

Another interesting finding is the importance of small business closings and farm foreclosures. In the very smallest communities the problem was ranked 2.04 compared with an average of 2.45 in the largest size groups. This finding makes sense when one understands that farmers have represented a relatively strong market for the smallest towns but are less important for larger communities.

Streets, roads, and sidewalks were reported as much more serious in larger communities but sewerage treatment systems were not. One might expect that larger cities have more miles of streets to maintain and probably maintain them at higher quality. Maintaining streets is a more significant problem in these cities but bridges do not seem to be as important a concern as roads.

Response to Loss of General Revenue Sharing

Because the loss of general revenue sharing is ranked so importantly by most city groups, it is useful to examine the responses to the loss of funds suggested by small town mayors (Table 2). Several options including raising other revenues and reducing expenditures were offered. The largest number responded that they will reduce operating expenditures, but closely following was a reduction in capital expenditures. It is interesting that respondents reported an interest in reducing expenditures rather than raising taxes or user charges. Property tax increases were reported by only 17.7 percent, and many of these may have reported expenditure cuts also.

While 46.8 percent will reduce operating expenditures, only 20.7 percent will discontinue services, another 6.7 percent will reduce employees through layoffs, and 7.4 percent will reduce employees through attrition. Because personal services represent the largest single municipal budget category, it is difficult to determine specific actions that will be undertaken in the next several years. Relatively few (9.7 percent) reported instituting a wage freeze. Some of these strategies will be necessary if expenditures are cut by a significant amount. It is true, however, that, overall, revenue sharing represented a relatively small share of municipal revenues and major revenue-raising strategies would not be necessary to make up deficiencies. The preference to not increase revenues in response to the loss of GRS is fairly clear.

Summary

The tabulations presented in this article are based on an initial analysis of the survey results. Cross-tabulations by region in Illinois, proximity to metropolitan areas, and economic base will follow in a larger

May 1988 / Illinois Municipal Review / Page 7

report for this project. One might expect local issues to vary, particularly with region.

Table 2. SOURCES TO OFFSET
GENERAL REVENUE SHARING

Economic development is a major concern to local officials, but we didn't need a survey to learn that. In a subsequent article, efforts by small communities to deal with loss of business and outmigration will be examined. In Illinois, small communities have many economic development tools and techniques available, and it is interesting which of the tools are effective and which are not.

Small communities are undergoing a long-term transformation. Better transportation, shifts from manufacturing and commodities to services, and the poor farm economy have dramatically changed the future of small towns. Some will be able to adapt and prosper; while others will experience major difficulties even staying alive economically. Location, infrastructure, and other factors will determine the fate of these areas. What is for sure is that we must better understand the issues and processes involved in development and deterioration if we are to effectively manage this period of change. Hopefully, some of the findings from this survey can assist in this learning process. •

¹The State of the Small City: A Survey of the Nation's Cities and Tow Under 50,000 (Washington, DC: National League of Cities, 1987)., p. v.

²Norman Walzer, Effects of Recession in Illinois Municipalities (Springfield IL: Municipal Problems Commission, 1984).

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