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Montgomery to put sales tax hike on ballot : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, Illinois
Montgomery to put sales tax hike on ballot
Citing need for road funds, board backs plan for fall referendum

by John Etheredge

3/13/2014

The Montgomery Village Board agreed Monday evening to seek passage of a referendum in November to increase the village's municipal sales tax to pay for street maintenance and other capital expenditures.

The village's current sales tax rate is seven percent in the Kane County portion of the village and 7.25 percent in the Kendall County portion.

The board has yet to decide on how much of an increase they will ask voters to approve. However, Village Administrator Jeff Zoephel told the board Feb. 10 village staff would recommend the village ask voters to authorize a one percent increase in the two rates.

Also during the Feb. 10 meeting, Peter Wallers, president of Engineering Enterprises, Inc., the village's engineering consultants, told board members the village will need an additional $1.8 million to $2.3 million annually to maintain the village's streets.

Wallers said his estimate is based on an in-person inspection of the village's streets and the use of a computer program.

He noted the number of streets requiring maintenance in the village has increased dramatically since 2000 due to the development of several new subdivisions on the village's far west side.

Justin VanVooren, the village's finance director, said each one-quarter of a percent increase in the sales tax would generate approximately $425,000 annually in new revenue for the village. Based on VanVooren's calculations, the village would receive an estimated $1.7 million in additional revenues annually.

In voicing support for seeking passage of sales tax referendum, Village President Matt Brolley noted the village does not have enough revenue available to maintain all of its streets.

Brolley noted the board and village staff have considered but ruled out three or four other options to raise revenues, including a village vehicle sticker program and passage of a Home Rule referendum. Home Rule status would give the village greater local regulatory authority along with the ability to increase the sales tax without seeking voter approval in a referendum.

"As I've said before I believe asking our voters to approve a sales tax referendum would be least burdensome upon our residents," Brolley said.

He noted that the sales tax is paid not only by village residents when they shop in local stores, but also by shoppers who live outside the village.

For example, Brolley noted that officials with Sam's Club have advised him that when the retailer's new store opens in the village's Ogden Hill shopping center this summer it is expected to attracted shoppers from as far away as 50 miles.

Board member Steve Jungermann said he believes increasing the sales tax to generate additional revenues is the best way for the village to boost revenues "because it spreads that (tax) burden outside of our borders as much as we can."

If voters approve the one percent increase, Jungermann said he believes the village's sales tax rate will still be among the lowest in the area.

"If we do a one percent increase and I spend $100 it will cost me an extra $1," Jungermann said.

Board member Theresa Sperling said she views a sales tax increase as the best option for the village.

Sperling said what she finds "most attractive" about the sales tax referendum is that it will be decided by voters.

"They can tell us 'yes' or 'no' if they want it," she said.

Board member Denny Lee said he believes the "quicker the better" it will be for the village to increase the sales tax due to the pending opening of Sam's Club.

Referring to Sam's Club, Lee said, "They draw people from all over the area and they are using our roads to get here."

Board member Stan Bond acknowledged he has spoken against raising the sales tax at previous meetings.

Bond continued, "I think it's important for the public to know that a great deal of homework has gone into this. I don't think anyone wants to raise the cost of living on anybody. But that's not really happening here, what we're trying to do is more an ounce of prevention as a pound of cure. We've looked at every option we can to try to raise funds to do the work we have to do."

Bond said he believes increasing the sales tax is the most "citizen-friendly choice we have."

He added, "Not to belabor the point, but I would like the public to know this has been an exhaustive process. We've looked at virtually every option-including doing nothing-and this (sales tax) is the choice."

Board member Doug Marecek agreed with his board colleagues, describing a sales tax increase as a "lesser of evils" and added, "We have to be able to fix the roads."

Marecek noted the village's engineer has advised the board that delaying street maintenance projects only serves to make the repairs more costly.

Responding to the board's comments, Zoephel said village staff will work to place the referendum on the Nov. 4 ballot.

Brolley said he now wants to "work through a plan" with the board to get information out to village residents on the village's need for additional revenue and to pass the November referendum.

"We want to make sure that they (village residents) understand everything we've gone through," Brolley said.

Based on his own experience, Brolley said he believes village officials may be challenged in explaining the village's need for additional revenues to maintain local streets.

Brolley said he recently discussed the sales tax referendum with his own parents who have lived in the village for years.

"When I was talking to my parents about it, it didn't go over very well-I'm not going to lie to you," he said. "So I think giving individual the information and getting it out there over the next several months will be important."

Brolley noted the board will not be asked to pass a resolution placing the referendum on the November ballot for several more months. He encouraged board members who may have further questions to contact him or village staff.




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