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 The option tax was established in October in 2008 and rescinded in 2017.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.
Let them borrow at your Peril – look at the situation nationally. If there is one thing that our country has proven is that Governments at all levels cannot be trusted with the power to borrow – period.
Because we were too busy spending 6 million on hay bales and assorted other quixotic fantasies. As for borrowing, I recall back in the early 2000’s when someone was on the Select Board, the town was borrowing short term debt to pay off long term debt. Usually short term borrowing is even more expensive than long term borrowing. Maybe you recall reserves were inadequately funded because Act 60 sky rocketed the property tax rate. And remember the event called Irene which wiped out the capital as well as all other reserve funds.
So, what has happened to pay as you go? Borrowing always is more expensive.
$7 million in road improvements?? Why borrow??
$1.2 million in golf course improvements? Has a reserve fund been built? Why not?