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Middlebury sets May 20 for local option tax vote

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By JOHN FLOWERS

MIDDLEBURY — Middlebury voters on May 20 will be asked to approve local option taxes of 1 percent on sales, rooms, meals and alcohol transactions in town for the next three decades in order to raise $7 million for a new bridge that will span the Otter Creek at Cross Street.

Selectmen made that decision on Monday evening, only hours after Gov. James Douglas signed into law a charter change that would give Middlebury the authority to implement local option taxes.

The board also decided on Monday to limit the lifespan of the new taxes to 30 years — the same timeframe for payback on an already-approved $16 million bond issue to fund the bridge, which will link Main Street with Court Street as a means of reducing gridlock in the downtown.

Middlebury College has pledged to cover $9 million of the project costs. The institution will make annual payments of $600,000 over 30 years, beginning when the span opens to traffic — perhaps as soon as the fall of 2010.

Figures provided by the Vermont Tax Department indicate a 1-percent local option tax on sales, meals, rooms and alcohol would’ve netted Middlebury $725,319 in 2007. That sum acknowledges the 30 percent in local option tax revenues that Middlebury — and any other community implementing such taxes — must turn over to the state for its payment-in-lieu-of-taxes program.

Middlebury Town Manager Bill Finger noted that all local option tax revenues would flow into Middlebury’s general fund before being used to retire debt on the in-town bridge project. He said there is a chance local option tax revenues could exceed the amount needed for debt service during any given year of the 30-year bond issue. If and when that happens, selectmen and the community will decide how to deal with such surpluses, which can be used only for municipal purposes. The town could choose, for example, to use the extra money to offset municipal property taxes and/or invest in improvements to town infrastructure.

Middlebury cannot, however, use surplus revenues to accelerate its pay-down on the bond, according to Finger.

Should voters endorse the local option taxes on May 20, they would kick in on Oct. 1 of this year and sunset on Sept. 30, 2038.

Residents and local merchants will have ample opportunity to weigh in on the proposed local option taxes at a series of informational meetings during the weeks ahead. Finger said meetings are tentatively scheduled for Tuesday, May 6, and Wednesday, May 14, at the municipal building. A special town meeting will be held on Monday, May 19, in the municipal gymnasium, to discuss the tax proposal. Australian ballot voting will be held the next day, from 7 a.m. to 7 p.m., also in the municipal gym.

May 20 is shaping up as a key voting day not only for Middlebury, but two other Addison County communities. On the same day, Bridport residents will go to the polls to reconsider a $1.25 million school improvement bond, and Ferrisburgh residents will consider a $1.5 million repair plan for their school.

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