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Montgomery to consider property tax rebate : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, Illinois
Montgomery to consider property tax rebate
If voters pass sales tax hike to fund streets village could rebate portion of tax bill

by John Etheredge


The Montgomery Village Board is expected to vote later this month to place a referendum on the Nov. 4 ballot asking village voters to approve a one percent non-Home Rule sales tax.

Board members have unanimously agreed the village needs the additional revenues the tax would generate to pay for its annual street maintenance program.

But Village President Matt Brolley said Monday evening the village may also offer village residents a rebate on the village portion of their property tax bills if the November referendum is approved.

Board members agreed to have village staff investigate and report back to them later this month on the feasibility of a property tax rebate program.

Brolley said he researched recent municipal referendums and found that voters in New Lenox and Shorewood both recently passed referendums that include property tax relief programs.

Brolley said offering village residents a property tax rebate would serve as an acknowledgement by the village to its residents that village officials are aware that residents are "over-taxed and we want to do our part."

Brolley, however, noted the village accounts for a very small portion of the total amount owed on the property tax bills village residents receive every spring.

"Setting the amount of the rebate would be tough, because if we were to set it at like 10 percent, 10 percent of $200 isn't that much, but 20 percent on a bill of $200 or $300 starts to add up," he said.

Brolley added he was scheduled to meet with the mayor of New Lenox this week to discuss the community's rebate program. He said the New Lenox rebate program grants residents rebates of about 60 percent on the village portion of their property tax bills.

Brolley said if voters passed the Nov. 4 referendum next April the board could also approve a property tax rebate for village residents based upon the amount of the village's budget surplus. The surplus, he said, would be realized through the increased sales tax revenues the village will receive if the November referendum is approved.

Unlike the property tax which is paid by village residents only, the sales tax would be paid by anyone who shops in village stores.

Board members voiced interest in offering residents a rebate, but also expressed some skepticism.

Board member Doug Marecek said he is "100 percent behind" Brolley's proposal to provide village residents with some property tax relief.

"I believe our intent is to spread our road repair burden across the people who are using our roads," Marecek said, adding, "I think it is appropriate that we put the costs where it is incurred: with the people using the roads."

Board member Steve Jungermann said he agrees with Marecek but wants to make certain that if the referendum passes the village has the revenue it needs to repair the roads.

"I don't want to give a property tax rebate prior to knowing we are fully funded for our roadways. I think it would do us an injustice if we go out for this (referendum), get it and then give the money back and create a hole (in the budget) again," Jungermann said, "But if we are fully funded, and our capital improvements program is fully funded, I'm absolutely in favor of offering a property tax rebate."

Review wording of
referendum question

In a related matter, board members reviewed and expressed some concerns about the proposed wording on the referendum question. A portion of the proposed question reads: "Shall the Village of Montgomery, to enhance the village's development, and to avoid the imposition of taxes and fees impose a one percent sales tax for expenditures on public infrastructure..."

Village Attorney Peter Wilson told the board that the question is written in accordance with state statute.

Wilson added that state statute would limit the village's use of revenues generated by the sales tax to public infrastructure projects, including street maintenance.

Board member Stan Bond indicated he would like to see the word "roads" included in the question.

Wilson noted that the phrase "public infrastructure" would include roads.

"The phrase 'public infrastructure' is kind of 'inside baseball.' I would be happier if we could find a way to express that (question) for exactly what we're meaning (to do with the revenue) and that's road maintenance, construction and repair," Bond said.

Marecek asked Wilson if the referendum question could be subject to a legal challenge if it specifically used the word roads, instead of public infrastructure.

"You might be able to do that," Wilson said.

"But if you use the money for curbs then would we be outside (what we could do with the revenue)?" board member Denny Lee asked.

Village Administrator Jeff Zoephel said he would hate to see the village "say roads and roads only" in the referendum question.

"I would like you to leave as much flexibility as you can, not knowing what circumstances we'll encounter in the future," Zoephel told the board.

Justin VanVooren, the village's finance director, told the board that a fact sheet on the referendum that the village plans to distribute to residents notes that additional revenue is "critically needed for road maintenance, repair and replacement, and other infrastructure."

Brolley said he would like to see the word "roads" included in the question "if at all possible."

Referring to the fact sheet, Brolley said, "I think some of the concern is that the people who want to read that information will and then there will be people who show up on election day, go in the poll, and they'll have to equate what we're all talking about with our need for more money for roads."

Peter Wallers, president of Engineering Enterprises, Inc., the village's engineering consultants, told the board during a meeting February the village will need an additional $1.8 million to $2.3 million annually to maintain local 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.

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 two rates are lower than the rates currently charged in Oswego (7.75 percent), Aurora (8.25 percent) and Yorkville (8.25 percent).

VanVooren has said each one-quarter of a percent increase in the sales tax would generate approximately $425,000 annually in new revenue for the village.

As a result, passage of a one percent tax would generate an estimated $1.7 million in additional revenues annually, based on VanVooren's calculations.

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