December 26, 2018
By Katy Savage
KILLINGTON— The town could see a significant tax increase in the future.
Town Manager Chet Hagenbarth said the town has accumulated about $2.2 million worth of debt, coming partly from about $588,000 of unfunded expenses from Tropical Storm Irene, and about $286,000 in golf course debt along with $250,000 in a repayment to FEMA.
Hagenbarth also expects about $14 million of future expenses, including the construction of a new $4 million public safety building, about $1.2 million in golf course upgrades, $3 million in recreation expenses and $7 million in road work.
“I don’t want to scare everybody,” Hagenbarth said. “There are significant projects that are going to have to happen. These are things that we are going to have to address.”
Hagenbarth presented options for borrowing money at a meeting Monday, Dec. 17. He projected tax implications for the next 10 years under different loan scenarios.
“Should we go borrow the money now while the money is cheap?” Hagenbarth asked.
Hagenbarth plans show taxes would see the largest increase in fiscal year 2021—the year loan payments would begin.
If the town borrowed money as needed, the current .40 tax rate per $100 of assessed property value would jump to .46 next year and to .51 in 2021. If the town borrowed money to pay for the projects up front and paid it back over 15 years, taxes would jump to .46 next year and then to .62 in 2021. If the town borrowed money up front and paid some of it back over 15 years and some of it back over 30 years, taxes would be .46 next year, then .62 in 2021.
A .46 tax rate would increase a resident’s property taxes on a $150,000 house by $148 while a .63 tax increase would increase taxes about $325 for the owner of a $150,000 home.
After years of fluctuating tax rates, Hagenbarth wants to put the town on a sustainable path moving forward.
“We’re trying to account for all the things we have to account for,” Hagenbarth said.
Hagenbarth said the town could earn interest on money it borrowed early.
The Select Board also considered bringing back the 1 percent sales option tax to offset costs. The option tax was established in October in 2008 and rescinded in 2017.
“We really don’t want to kick the can anymore,” Select Board chair Steve Finneron told the audience. “On the front end it looks oppressive but it’s not. Everything that he’s presented—the town’s going to end up paying for it.”
The Select Board has not yet decided on a budget to send to voters on Town Meeting Day.
“It doesn’t seem to me completely exorbitant,” said resident Roger Rivera. “We have to get it done. Whatever way the voters approve it, I’m good with it.”
Some questioned if voters would support a budget with a size-able tax increase. Select Board member Jim Haff said it was up to voters to decide.
“It doesn’t matter, that’s what a vote is,” he said.
1 Comment
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Vito Rasenas
December 31, 2018 7:38:41 am
Because we were too busy spending 6 million on hay bales and assorted other quixotic fantasies.
$7 million in road improvements?? Why borrow??
$1.2 million in golf course improvements? Has a reserve fund been built? Why not?