Saturday, October 12th, 2024
Vote '24
Voters to decide fate of 0.5% income tax levy
By Georgia Rindler
COLDWATER-Village residents will be asked to vote on an additional 0.5% income tax levy at the Nov. 5 general election. This would increase the overall income tax rate from 1% to 1.5%.
If approved, the levy will generate about $1.15 million annually. Village finance director Jason Eyink said the extra revenue would be used mostly for street repairs. With recent inflation costs it is harder to complete the larger projects.
Additional revenue is needed to fully repair some of the main streets in town such as Vine, Butler, Terrace, Second and Cedar. Depending on available grants, the village spends about $400,000 each year on street repairs. The section of Terrace Ave. that needs repaired is estimated to cost $700,000 for a full depth repair.
Money could also be uses toward improvements in Memorial Park and to bring up wage levels. Employee wages, especially those of the police department, are falling behind other communities.
The current 1% income tax has been in place since July 1987. It generates $2.3 million annually and flows into the general fund, which pays for the village's day-to-day operations. Income tax revenue accounted for 65% of the general fund in 2023.
Coldwater residents are taxed based on where they work and are required to file a tax return with the village of Coldwater since that is where they reside.
According to the handout presented at a public meeting in June, a resident who works in the village and makes $50,000 a year currently pays $500 annually. The new amount would be $750 if the tax increase passes.
Village residents who currently work outside Coldwater and pay income taxes in another town are granted a maximum credit of 1%. If the additional 0.5% income tax is passed residents would receive a credit at the new rate of 1.5%. For example, someone who lives in Coldwater and works in New Bremen would pay no additional tax on the income earned in New Bremen.
All local municipalities in the area with a population of greater than 2,500 people have a current income tax rate of 1.5%.
If passed by voters, the levy will run for five years beginning Jan. 1, 2025.
