Learn why Deer Park officials want to increase the town's sales tax rate
Deer Park officials will hold a virtual public forum Thursday night to explain why they'll soon be asking voters to approve a temporary sales tax rate increase.
The discussion will be part of a special village board meeting set for 7 p.m.
After an introduction by acting Village President Greg Rusteberg, officials will review the village's financial situation and the factors leading to the referendum on the April 6 ballot.
To watch the forum online, go to global.gotomeeting.com/join/454156669. You can also participate by calling (877) 309-2073 and entering access code 454-156-669.
Officials have proposed boosting Deer Park's portion of sales tax by half a percentage point because the COVID-19 crisis has reduced much-needed sales tax revenue. If voters approve the plan, the higher rate would be in place for three years, starting July 1.
Deer Park's overall sales tax rate is 7.5%, so the rate would be 8% for those three years. The rate would return to 7.5% after the three years pass.
Deer Park's annual sales tax revenue dropped from more than $2.65 million in the 2019 fiscal year to about $2.58 million in the 2020 fiscal year, which included the first two months of the COVID-19 crisis.
The sales tax haul for the current fiscal year, which ends April 30, is expected to drop to about $2 million, again because of the pandemic.
The proposed increase would result in an additional 50 cents of tax for every $100 spent, which could net Deer Park an extra $700,000 annually, officials have said.
If voters reject the plan, budget cuts will be needed to avoid running a deficit, officials have said.
Unlike most towns, Deer Park doesn't levy a property tax. As Trustee Jodie Johnson put it, sales tax cash is the village's "bread and butter."
"Because of the pandemic, we have had to drastically cut back on village services -- services that our residents have come to expect," Johnson said. "Our stormwater drainage and road programs cannot be funded without a sales tax increase."
Johnson voted against putting the question on the ballot because she believes the tax rate increase should be permanent. But she urged voters to support the proposal.
"A temporary sales tax increase may not go far enough, but it's a start," she said. "Deer Park desperately needs it."
Deer Park voters last approved a quarter-point sales tax bump in 2018.
In-person early voting begins March 12.