Bridge tax up for debate in Middlebury

January 28, 2008
MIDDLEBURY — Middlebury selectmen on Thursday, Jan. 31, will seek public feedback on the concept of boosting the town’s sales, rooms, meals and alcohol taxes by 1 percent to generate revenues for a new in-town bridge at Cross Street.
Thursday’s hearing, set for 7 p.m. in the municipal gym, will be the first in a series of meetings and votes selectmen will need to convene if the town is to implement a series of “local option taxes.” Board members are hoping to have those taxes at the town’s disposal to pay down a portion of the estimated $16 million price tag of a proposed Cross Street bridge project.
Middlebury College has already promised to donate $9 million toward the project, which would link Main Street with Court Street across the Otter Creek, via Cross Street. Selectmen are hoping to cover the balance of the project costs through local option taxes and federal highway money, thereby eliminating the need to raise local property taxes.
At this point, selectmen are looking for the ability to implement all the available local option taxes — sales, rooms, meals and alcohol.
“The board is looking at all four, thinking it is the fairest way to distribute the burden,” said Middlebury Town Manager Bill Finger. “It is also the most direct was to spread the (tax) base out.”
Figures provided by the Vermont Tax Department show that a 1-percent local sales, meals, rooms and alcohol taxes would have netted Middlebury $725,319 in 2007. That, combined with the college’s commitment of $600,000 annually over the life of a 30-year bond for the project, should more than cover yearly debt service payments, officials said. Finger said the town is still crunching numbers on the exact annual payments Middlebury will need to make a 30-year bond.
Any excess revenues from the local option taxes would flow into the general fund and be used to draw down property taxes, according to Finger.
“We would not be looking at putting these revenues into the general fund to have additional money for expenditures; we would be looking to reduce the property tax burden,” Finger said.
Finger and Middlebury Business Manager Joe Colangelo also stressed that local option tax revenues can fluctuate from year to year, depending on the economy and people’s shopping, dining and vacation habits.
Voters will have multiple opportunities during the coming months to endorse — or kill — the local option tax initiative.
Selectmen will ask voters on Town Meeting Day to request that the Legislature change Middlebury’s town charter to pave the way for local option taxes. If the vote is “yes,” the Legislature is likely to grant the charter change this session without a lot of debate. Middlebury voters would then be asked to implement the local option taxes. If all goes smoothly, Finger believes local option tax revenues could begin flowing to the town by this coming October.
Burlington, South Burlington, Brattleboro, Williston, Rutland City, Stratton, Dover and Manchester are examples of Vermont towns that currently have local option taxes.
Selectmen will be spending a lot of time between now and Town Meeting Day trying to inform residents about the bridge project and the local option taxes. Town officials know it will be particularly important to inform, and get the support of, area retailers, restaurateurs and lodgers.
The board made a presentation to members of the local business community Thursday evening.
Middlebury Business Association (MBA) Coordinator Gail Freidin said her membership has not taken a position on the subject of local option taxes, and may not.
“I suspect out members will be divided about it,” Freidin said. She explained some businesses owners will see the local option taxes as a way to bring about a bridge that could greatly help the downtown, while others will perceive the proposed taxes as presenting shoppers with a disincentive to spend money in Middlebury.
“Our main objective right now is to get people informed about (the proposal),” Freidin said. “I think selectmen have a lot of research and information to present on this, and I think they deserve to be listened to.”
Two local business owners contacted by the Addison Independent on Thursday said they wanted to find out more about the local options tax plan before commenting.
David Disque, owner of Forth ’N Goal Sports, said he supports the idea — one that he said embodies the same principles as the current Middlebury Downtown Improvement District (DID) tax. Businesses located within the DID (essentially, the core village area) are currently assessed a premium property tax to help fund improvements to public property within the district. Similarly, Disque believes another in-town bridge will benefit the downtown at large.
“I just have to think that the potential of Middlebury is not being tapped yet, and I think the bridge can make it a more vibrant downtown and answer some of the sprawl issues,” Disque said.

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