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posted: 2/6/2014 3:36 PM

Winfield referendum asks for another local sales tax increase

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  • Winfield is seeking another sales tax increase through a March 18 referendum proposal. Voters last year approved a quarter-cent sales tax boost to help fund road improvements and this year the village is asking for the same thing.

       Winfield is seeking another sales tax increase through a March 18 referendum proposal. Voters last year approved a quarter-cent sales tax boost to help fund road improvements and this year the village is asking for the same thing.
    Scott Sanders | Staff Photographer

 
 

For the second time in a year, Winfield voters will be asked to approve an increase in the local sales tax to help pay for road repairs.

Last April, about 53 percent of voters approved increasing the local sales tax from 7.25 percent to 7.50 percent. Village officials say the extra 0.25 percent generates about $75,000 annually.

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On March 18, voters will decide whether to raise the percentage by another 0.25 percent, bringing the total local sales tax to 7.75 percent. Grocery and medication sales are exempt.

"It's a preferable means for getting revenue," Village Manager Curt Barrett said, noting that people from outside the village share the burden when they make purchases in Winfield.

The village currently uses about $250,000 from the motor fuel tax -- an amount that keeps decreasing, Barrett said -- and about $100,000 to $200,000 from its budget to repair an average of 1 to 1.5 miles of roads each year. The extra revenues from last year's sales tax increase will help pay for less than a quarter-mile of work annually, Barrett said.

While those sources of income have been helpful, they were not enough to get all 34 miles of the village's roads in good condition.

As a result, the village board agreed in November -- despite an outcry from some residents and village board members -- to issue general obligation certificates totaling $4 million. The borrowing is costing the owner of a $235,000 home about $49 more in annual village property taxes.

"Increasingly, we were facing this dilemma of if we keep pushing this off and (the roads) start completely crumbling, it will cost us way more to fix it," Barrett said.

He said the village's latest estimate indicates repair costs are going up about $1 million each year the work is put off.

"We were better to bite the bullet," he said.

The certificates will cover the cost of fixing almost all of the village's roads that are classified as "poor" or "failing," Barrett said. Work will begin in the spring, and over the next two construction seasons about 40 percent of all the roads in Winfield will be repaired and resurfaced.

But there will still be more roads that need to be done in subsequent years, Barrett said.

"After we fix the failed roads, which we're doing now (with the $4 million), we still need about $650,000 a year to stay on a 20-year cycle," he said. "We've fallen way behind that cycle."

With the potential for commercial development along Roosevelt Road in the coming years, Barrett said it makes sense to increase the local sales tax so it can help pay for the roads and be more comparable to the sales tax rates in surrounding communities.

"You need to have the sales tax in place so when you have businesses open you have a tax that can capture that revenue stream," Barrett said.

Because the village doesn't have home-rule status, it can only ask for local sales tax increases in quarter-cent increments through a referendum.

Barrett said there is talk of putting the same referendum question on the ballot for two more years so the local sales tax is increased by a full percentage point, but the village board will make that decision after this year's election.

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