Gilberts proposes 1 percentage point sales tax hike

Deciding which trustee candidates to vote for won’t be the only choice Gilberts residents will have to make in the April election. The ballot will also give voters the option of approving a 1 percentage point sales tax increase.

The proposed increase would give the village 1 cent more per dollar to put toward road improvements.

“A majority of the residential streets in our older parts of town are in decline and need to be resurfaced,” said Ray Keller, Gilberts village administrator.

Resurfacing soon will allow the village to avoid reconstruction later.

With existing revenue streams, the village can fund two-thirds of the project cost but there is a gap of about $130,000 to $140,000.

“The sales tax referendum, if passed, would close that gap and would allow us to go forward and repave the streets in our older neighborhoods,” Keller said.

In addition to the current repaving needs, Keller said borrowing now would give the village the chance to take advantage of relatively favorable interest rates on the 10-year bonds under consideration.

Once the bonds are paid off, the continuing sales tax revenue would go toward similar projects in the other residential areas. Keller said the tentative plan would be to repave about half the residential streets in the village every 10 years, keeping the tax revenue always flowing toward road improvements.

In the past Gilberts has funded street projects by creating Special Service Areas (SSA), which increased taxes only on the people living in the neighborhoods needing road improvements.

The sales tax increase would distribute the burden across the entire community and beyond. Every person who spends a dollar in Gilberts would contribute that penny toward the project fund.

Keller said that’s an advantage to those living in the village.

“It’s not a direct dollar-for-dollar impact on our residents, like the SSAs were,” Keller said.

Village staff is putting together more information about the potential effects on residents and businesses of the tax increase and will hold an information session sometime in March.

Keller said the sales tax increase is one option for paying off the needed street projects. April’s vote will give residents the opportunity to say whether they support it or not.

If the tax increase passes, it will go into effect Jan. 1, 2012.