A municipal tax increase will be considered to halt a depletion of the village’s general fund over the next two years.
According to a five-year forecast presented to council by village manager Steve Dupee, without some new form of revenue the general fund will be $14,581 in the negative to start 2020, negative $459,136 in 2021, and negative $974,715 in 2022.
“It’s the accumulation of negative net margins,” said Dupee. “I’ve taken a straight-line estimate of revenues increasing by one percent per year and expenses increasing by three percent per year. We had less municipal income tax proceeds in 2017 than we did in 2016. Things could change. Right now, this is a forecast based on assumptions.”
The fund holds $671,867 heading into 2018. Council has already approved one measure that’s added roughly $320,000 to that total: a $100,000 cap for municipal tax proceeds going to the capital improvement fund.
Before the change, the capital improvement fund would receive 25 percent of those proceeds, or roughly $425,000.
When the general fund balance fell to $229,271 in 2013, a measure was passed the following year that sent 5.5 percent of each village utility’s annual revenue to the general fund.
As it stands, Wellington residents pay a one percent municipal income tax. According to state law, any increase to that would have to be approved by voters.
The last municipal tax increase for Wellington occurred in 2002 when a tax credit was abolished for residents who work outside village limits and already payed taxes to another municipality.
“We’re trying to look at ways to curb expenses but also how we can increase revenues,” Dupee said. “There are a number of ways a municipal tax increase could be crafted and that’s what we’re looking at now.”
“The change in 2002 provided some additional revenue,” he said. “It’s helped keep things stable but it’s been 15 years. This is a reflection of the economy since 2008 and a number of income streams from the state being significantly reduced between 2010 and 2014. The village didn’t address those shortfalls and we’re experiencing the impact of that now.”
Other new revenue streams being discussed are a five- or 10-year levy and possibly restructuring fees to use village hall or Wellington Community Park.
“Everything is on the table,” Dupee said. “There’s a number of priorities council has in terms of relocating the police department and the development of the former middle school property. Certainly, they’ll be a continued investment in other infrastructure projects too. We have to find a way to fund them while keeping our general fund solvent.”
Jonathan Delozier can be reached at 440-647-3171 or @DelozierNews on Twitter.