Board votes to include two articles on tax
by Mike Eldred
Jan 17, 2013 | 2689 views | 0 0 comments | 5 5 recommendations | email to a friend | print
WILMINGTON- After public discussions at three meetings over the last week, selectboard members voted to include two articles on the Town Meeting warning related to the 1% local option tax.

The first article asks voters to create an “economic and community development reserve fund.” A second article will ask voters to use all the 1% local option tax collected in 2013 and 2014 to fund the account. If passed as written, after fiscal year 2014 the 1% tax funds would revert back to the town’s general fund unless voters approve a similar article at the March 2014 and subsequent Town Meetings.

Two weeks ago, board members discussed whether they would use $100,000 or more of the local option tax collected in fiscal year 2013 to reduce the tax rate. Board members also discussed whether the future proceeds of the tax should be held in a special account, or remain in the general fund. At a special meeting last Wednesday, almost 40 local voters jammed the meeting room to urge board members to put the local option tax funds in a reserve account to be used for economic development.

At another special selectboard meeting Monday evening, selectboard chair Tom Consolino suggested that a proposed article to use the 1% tax for economic development should specify that the money “is not to be used for reducing taxes.”

Board member Susan Haughwout told voters that the board was committed to economic development. But she said that economic development may mean different things to different people. She noted that the town and water district may soon consider a merger, because the water district is under pressure to upgrade their system to meet regulatory requirements. She said the project could be a “huge expense,” and a failure to follow through could impact the district’s ability to provide potable water throughout the commercial district “in a village that’s already struggling with other things.” The burden of the cost would fall on the 270 users in the water district, but Haughwout said she would consider the project economic development. “So should we use the 1% to offset the tax?”

Local businessman and chamber of commerce director Adam Grinold disagreed. He said he sees improvements to the water district not as economic development, but as an infrastructure issue that is the responsibility of the town.

Much of the discussion at Monday night’s meeting was repeated at the board’s regular meeting Wednesday evening. On Monday, some voters asked the board to present an article that would put the 1% revenue in the economic/community development reserve fund in perpetuity. Local business owner Mary Wright said the town needed to be able to plan projects over more than a year. “We need to do this long term, give it legs, and get going. If we’re voting on whether or not to fund economic development year after year, that’s erratic and unstable.”

Business owner Jerry Osler also expressed concern that priorities could shift from year to year. “So this year we’re voting on an article to fund,” he said. “Next year I’m going to vote for something that might be the ‘Scott Murphy fund for the 10%?’ Every year we’ll have a warning that will say that (local option tax) money is going wherever?” Murphy smiled at Osler’s joke.

Board members agreed to seek guidance on language for a one-time article to put the 1% tax revenue in the reserve fund each year. But on Wednesday, the board voted 3 to 2 against offering the one-time article.

Consolino offered a motion to add the words “each year” into the previously proposed reserve account funding article, which would have placed the proceeds of the 1% tax into the account until voters decide otherwise.

Board member Meg Streeter, who has said she doesn’t support the articles to establish a reserve account and fund it with the 1% tax, asked if Consolino’s motion would mean “next year we wouldn’t propose a specific plan?”

Consolino said the board wouldn’t present a plan or article regarding funding, but “with regard to how it would be spent, there would be another article.”

Business owner Lisa Sullivan urged the board to pass Consolino’s motion, saying the town shouldn’t have to struggle with the same question on an annual basis. “I’m not sure we need to, or should, have this debate every year,” she said. “If we’re going to have the argument, then have it about the 1% tax rather than having to debate again next year whether it should go to reduce taxes. We’ll have to have this debate every year.”

Renee Galle agreed. Referring to an opinion offered by town attorney Bob Fisher that it would be “cleaner for the voters” if the funding question were to be voted every year, she said “I hope Bob’s opinion doesn’t hold more weight than the room. Bob’s great and we love him, but we don’t need to do this again and again and again. I would encourage you to put (the article) in with annual funding.”

Grinold said the disposition of the 1% tax should last as long as the tax itself. “If we’re comfortable creating the 1% tax and we’re told it can go on without having to go back to the voters every year until they decide to dissolve it, why would we do this year after year?”

Gordon Ritter said it was a matter of simplicity. “The discussion we should be having at Town Meeting is what we’ll spend the money on.”

Several voters said they were concerned that the money would eventually end up in the general fund. Sullivan said that if, for some reason, the article were not to appear on a future warning, the money would automatically go into the general fund. “And then it will be used to offset taxes, and that’s what people are saying they don’t want.”

Arlene Palmiter said there was an “undercurrent of people who potentially want to fund taxes and other things” with the 1% tax revenue.

Haughwout asked why the crowd didn’t want to “take it to the voters every year.”

Wright said it was a matter of the town’s ability to plan economic development efforts over the long term. “If you can count on about $100,000 a year, you can plan projects over several years. If you have to wait for approval in March every year, it puts you in a tenuous place. I think that’s a valid reason to consider making the funding in perpetuity.”

Grinold agreed. “The single most important decision our community is going to make is whether we’re going to invest in ourselves long term. If we’re only going to invest for one year, we’re not really investing.”

But Jake White said everything else in town is funded by a budget that’s voted on every year, and the town has been able to fund long-term projects. “Every year we decide whether we’ll fund the police department and the fire department,” he said.

Several people answered that it wasn’t the same. “Yes it is,” shot back some board members.

The board also returned to the language of the article establishing the fund. Consolino said he was “troubled” by the inclusion of term “community development” in the article as one of the things the fund could be used for. He said the first draft only included “economic development.”

Haughwout said she had asked that the term “community development” be included so that use of the funds wouldn’t be strictly limited.

But those at the meeting disagreed, saying they preferred the use of the fund to be limited to economic development. “I would want the definition to be as narrow as possible,” said Sullivan. “There’s a tendency to look at the option tax as a panacea for all the ills we have. But it’s not that much money, and we need to focus our efforts. There are economic development plans already in place that we can use as a guideline. There are plans we haven’t funded.”

Haughwout asked voters to trust the board to handle the funds wisely. “I hope that you all can conjure up a little bit of trust,” she said. “I don’t feel any movement underfoot to put together a huge Taj Mahal with what you want to use for economic development. My position on this language is that we don’t know everything about the future or what we’ll feel about a future project that may come to us. We want to be able to come to you and ask if it’s something we should do with the 1%.”

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