Wheaton eyes sales tax hike
Wheaton residents will likely see a tax increase to balance out a $3 million budget deficit in hopes of keeping just the minimum services the city currently provides.
By all accounts, it may be just the first of multiple tax increases.
City council members met in a planning session Monday that actually resulted in the council adding about $300,000 to the budget deficit.
The additional costs will provide funding to hire a consultant who will help the city plan the redevelopment of the Hubble Middle School site. The land is set to be sold and the school razed. The money will also fund a part-time property maintenance inspector.
The big question moving forward is how to address the deficit on a more permanent basis.
Some of the funds will be found in the city's savings accounts, but those funds will eventually run dry.
Some of the money will come from funding projects through fee increases and special taxing districts.
For instance, the city will likely create special taxing districts to fund the construction of sidewalks that transport children to and from school. Up to now, that money came from donations required of new construction projects in the city. That account is now empty. The new taxing districts would have the homeowners that surround the new sidewalks pay for them.
If reserve funds and new fees are the first two methods to attack the budget deficit, tax increases are the last, but likely, resort.
City staff presented the council with projections for what a 0.25 percentage point increase to the sales tax would reap. The numbers show about $950,000 in new revenue. However, that assumes sales in town remain the same in a slow economy. Also, a sales tax increase created April 1, wouldn't start to be collected until July 1. That's already a couple months into the city's fiscal year, which negates part of the benefit.
The council also said Monday that next year's budget deficit will almost certainly be much worse. At that point, especially if home values fall, a property tax increase may be necessary.