Volo raises sales tax by 1 percentage point

Volo officials kept their promise and raised the local sales tax by 1 percentage point to offset the cost of future road construction.

Mayor Burnell Russell said the sales tax increase - from 6.5 percent to 7.5 percent - began July 1, but will not affect the cost of food, medicine, or boat and car sales.

"Everyone knew way ahead of time that this is something we wanted," he said. "So, it really shouldn't be a shock to anyone."

Volo was able to boost its sales tax when voters approved a February referendum that gave the small town home rule status. Officials in the village of 1,000 residents said the additional tax money will pay for new turn lanes, traffic lights and other transportation projects to keep pace with residential and commercial growth.

Future water and sewer lines also could be financed with the additional sales tax revenue, if needed, they added.

Under state law, village boards or city councils in communities with at least 25,000 residents can pursue home-rule status on their own. Towns with smaller populations must ask voters for permission.

Russell said the increase is expected to generate an extra $600,000 annually - $300,000 in 2008 because the tax will be in place for only about a half year. The village collects about $600,000 in sales taxes every year, he said.

"We haven't fielded any complaints about the sales tax proposal at all," Russell said. "This is the only tax increase we plan to do under home rule, as we promised the residents."