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Bloomingdale reduces its telecommunications tax

Six years after Bloomingdale enacted a telecommunications tax to address a large budget shortfall, village trustees are reducing the fee.

As a result, residents will see a decrease on their phone bills starting Jan 1.

On that day, the 5 percent telecommunications tax the village adopted in July 2010 will drop to 3 percent.

The tax applies to the gross amount of bills for mobile phones, landlines, internet and other services.

"The eventual elimination of this tax is a goal of mine, and the reduction is our first step toward that goal," Village President Franco Coladipietro said in a statement.

Bloomingdale originally created the tax to address what was then a $1.7 million shortfall in the village's budget. At the time, several factors - such as falling sales tax revenues and flat property tax income - were causing a disparity between expenses and revenues.

Village Administrator Peter Scalera says Bloomingdale's financial situation has since improved because officials have found ways to save money.

In fact, the village balanced its budget even though revenue generated from the telecommunications tax has declined in recent years. On average, the village is collecting $678,000 annually from the tax.

"Based on that - and because we were able to tighten the belt here and there - we just felt this is a tax that is an additional burden to the residents," Scalera said.

The village board hopes to phase out the entire telecommunications tax by 2022.

Scalera said the 2-percentage-point reduction is expected to save the average Bloomingdale resident $12 a year.

He said the hope is that sales tax revenue will increase as the telecommunications tax is being phased out.

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