Quarter-cent sales tax hike would fund flood relief, pensions in Niles

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Updated: February 27, 2012 8:32AM

Niles village trustees will consider a quarter-cent sales-tax increase at the regular village board meeting Jan. 24.

The reason for the sales-tax increase is to create funding to help solve flooding issues in the village. If approved the increase would go into effect in July.

The initial phase of a project to improve infrastructure to help relieve flooding problems would cost $10 million to $15 million. After making payments on bond issues for the projects, leftover revenues would go toward funding pensions.

The board is also considering a cost-sharing program that would cost $450,000 per year. Money generated from the tax hike would fund the program.

Under the cost-sharing plan, the village and residents would split the costs of installing overhead sewers in private homes.

At the previous village-board meeting some trustees said they were opposed to the idea of a cost-sharing program because the village should focus on fixing the infrastructure.

If the board approves the sales-tax increase the village would collect about $2.1 million, said Niles Finance Director Scot Neukirch.

“I believe that money should be spent on work that will benefit the greatest number of people in our community,” said Niles Village Trustee Rosemary Palicki. “If this program was to be funded by a tax, we would be helping a small number of individual homeowners increase the value of their houses at the taxpayers’ expense.”

If the village decides to spend $10 million for the initial phase on capital projects there would be about $935,000 available for pensions. If the board spends $15 million on the initial phase, $550,000 would be available for pensions.