Income Tax Levy
Frequently Asked Questions
1)How will the money from the new income tax be used?
a.The income taxes generated from the new levy can only be used to fix, replace, and improvecommunity property in the Village. The taxes cannot be used for operating costs or salaries ofany type.
2)What are the improvements that need to be made?
a.The community is in need of many repairs and replacements. The most critical are with our waterand sewer system.
3)What’s wrong with the water and sewer system?
a.Both utility systems are very old, and in some cases the lines that bring water to and from ourhomes and businesses are more than 50 years old. Because of their age, the systems break downmore and more often leading to more water boil alerts, waterline breaks, and sewage backups.
b.In some cases, buildup in the lines is reducing the flow of water which lowers the water pressureneeded to fight fires.
c.In other cases, the age of the facilities and condition of the lines is impacting the quality of thewater we get at our homes and businesses, and has in fact resulted in water supply outages. Withimproved facilities, we can improve the quality of our water and reduce the chances of theequipment failing and causing additional water supply outages.
4)Why ask for an income tax instead of paying for the needed improvements from our utility bills?
a.The cost to make the improvements needed to the utility system is very high. By using incometaxes instead of utility rates, the cost of making these improvements can be spread over a largergroup of taxpayers, since income taxes are paid by non-residents, as well as residents of thecommunity. That means by using an income tax, our residents will actually pay less than if thecost was built into our utility rates.
b.Our community benefits from utility rates that are already below the state average. Our citizenshave expressed a strong desire to keep these rates affordable in the future. Using an income taxwhich taxes non-residents and businesses addresses this concern.
5)Why is an income tax the best way to pay for the community’s needs?
a.Our town has three ways to pay for the needed maintenance and upkeep of our systems andfacilities; 1) user fees (discussed above), 2) income taxes, and 3) property taxes. Before decidingon which of the three to use, an outside expert reviewed which approach would keep the cost aslow as possible to our residents. The conclusion was that an income tax is the least expensive andmost fair for us.
6) How is an income tax the least expensive and most fair to us?
a. Our town needs $650,000 per year to address the most critical parts of our aging Village framework. That amount of money equates to 8.56 mills if collected as a property tax. Based on the median home value in our town of $183,800, a property tax would cost us $551 per year, and would tax us regardless of our income or age. The income tax of .50%, based on our median household income of $53,063, would cost us $265 per year.
b. Income taxes are only collected against earned income, and includes both residents and non-residents who work in the community. It does not tax senior citizens on fixed income, unemployment benefits, or capital gains.
c. By including non-residents and businesses in the payment pool, and by protecting residents who are living on social security, pensions, or those collecting unemployment benefits, we are able to keep costs lower for everyone, and treat fairly those who are least able to afford new taxes.
7) Why doesn’t our community offer a credit against the existing income tax?
a. Our community receives less in basic property taxes than most Villages of our size. That requires the need to make up the difference in income taxes. An income tax credit would lower the community’s tax income and leave us unable to pay for the basic operations of the Village.
b. Because we have a low income tax rate right now, offering a credit in the future would be very difficult to do.
8) What can you do to help those of us that pay income taxes in other Cities?
a. Even though it is difficult to offer a tax credit for taxes paid in other Cities, the Village is able to lower the property taxes our residents pay for Village services.
b. Council recognizes that residents who pay income taxes elsewhere are most impacted by a new tax. Therefore, if the income tax levy passes, council plans on reducing the property taxes to help our residents. Council is willing to lower the Village’s property tax rate by .50 mill.
c. This property tax reduction will benefit everyone who owns property in the Village whether they work and pay income taxes in other communities, or not.
9) Is it true the Village plans to build a new Village Hall with the income tax?
a. No. However, the Village does need to find a more efficient and less expensive way to operate and provide services to our families and businesses. Our current facilities are very old, inefficient, and very expensive to maintain. Therefore, we are researching the costs of options that can be paid for with the savings created from operating more efficiently. A new building would not meet this guideline and therefore isn’t a practical solution.
10) What are the benefits to me if the Village receives more money?
a. The taxes will support making our community safer, nicer, and ensure the things most important to us are not jeopardized because of a lack of money in areas such as:
i. Better service, reliability, and quality of water;
ii. Nicer park facilities and programs;
iii. Reliable fire protection;
iv. Improved community events and fireworks;
v. Safer sidewalks and streets;
vi. An improved Downtown streetscape; and
vii. Improved value of our homes and businesses.