Low Interest Rates Translate to Poor Earnings for Park Forest Taxpayers

Drops in interest rates have not been good for Park Forest taxpayers.

Park Forest, IL-(ENEWSPF)- Interest rates have declined substantially over the past four years and this has meant a real loss for Park Forest. Village Board members learned Saturday just how much.

At a financial update session that got underway shortly after 7:30 a.m., staff reported the reality of Village of Park Forest savings in 2011.

According to a memorandum prepared by Mary Dankowski, Deputy Village Manager/Finance Director, in 2007, an average deposit of $3,000,000 would have earned 5.066% interest, or roughly $151,980. Park Forest keeps at least a three-month cash reserve in bank accounts for emergencies.

By 2008, rates had been slashed to 2.067%, earning $62,010 on the same amount. In 2009, the rate had fallen to 0.153%, earning $4,590. 2010 saw a slight jump to 0.193%, with the same $3 M earning $5,790.

In 2011, the rate fell again to 0.031%, with all that taxpayer money earning only $930.

Only $930 interest.

Good thing the banks are paying out all of those bonuses to the CEOs, right?

The writer is a Trustee in Park Forest.