Waterville: Permanent income tax being aired

2/8/2006

Faced with expenses that are rising faster than its revenue, Waterville officials are trying to come up with ways to bring in more money.

One likely option discussed last week at a joint meeting of village council and the village finance committee is making the village's 2 percent income tax permanent.

Only 1.5 percent of the tax is a permanent tax. The other half percent comes from a five-year tax that has been renewed by voters four times since 1982, most recently in 2002.

Tom Titus, chairman of the village's finance committee said the village should determine voters' feelings on making the tax permanent well before it ex-pires next year.

Making the tax permanent, while not providing a new source of revenue for the village, would install a firmer planning process, he said.

"From a planning standpoint we like to know that it's a given that we have a 2 percent income tax," Mr. Titus said.

Village officials worry that voters may decide not to renew the tax, either the next time it's on the ballot or later.

If that were to happen, the village would consider changing the tax credit that residents who work in other municipalities are given. That could mean that village residents who work in other municipalities would not pay any less in taxes, and could even pay more.

Village officials also discussed increasing revenue by assessing residents for shade trees in the public rights of way or for street lights. The village could raise $20,000 from tree maintenance fees and $80,000 from street lights, administrator Jim Bagdonas said.

Other possibilities include a levy for refuse pickup or a tax on new hotels and motels that could follow the U.S. 24 bypass to the area.

Mr. Bagdonas emphasized that assessment money would be used only for the specified purposes.

"You can't buy a police car with shade tree money," he said.

But the village has no assessments, and many councilman said they don't want to create some.

"One of the things we sell to the community is we have no assessments," Councilman Tim Guzman said.

He added that assessments are the last thing the village should look at.

"We can run this village and do it right with the 2 percent income tax that we have now," he said.

Some options exist or cutting expenses.

The village could save some money on road salt by salting only certain streets or parts of streets down to bare pavement, Mr. Bagdonas said.

It budgeted $34,000 for road salt for 2006, which Mr. Bagdonas said could be cut in half.