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Town Eyes Tax Hikes

FARMVILLE – Seeking ways to make ends meet, a proposed $17 million 2011-12 Town budget including an increase in both the meals tax and real estate tax will be considered by Town Council.

The meals tax would increase from 6.5 percent to 7 percent and the real estate tax from 10 cents to 12 cents per hundred of assessed value in a budget proposal submitted to Town Council by Town Manager Gerald Spates during council's May work session Wednesday morning if Town Council were to embrace the proposal.

Town Council will continue its budget deliberations next week before formally embracing a budget proposal to submit to Town residents in a public hearing.

Town officials had previously discussed raising the meals tax from 6.5 to eight percent, with no increase in the real estate tax, but opposition to the proposal has apparently influenced budget considerations.

Increasing both taxes would not place the entire burden of generating more revenue on one tax alone, in this case restaurants and their patrons.

“Spread the wealth,” was how council member Donald L. Hunter described it.

Spates said, “the seven percent is not a big hit. I know they would rather not pay any.”

Council member Dr. Edward I. Gordon said a seven percent meals tax would place the Town of Farmville in the middle to lower range of meals tax rates in the state, whereas eight percent would have been at the higher end of the scale.

“We wanted to be fair,” Dr. Gordon said. “We want Farmville to stay friendly.”

The real estate tax boost, Spates noted, would also prevent the Town from creating a sanitation fee for those services.

“And also we put in there an increase in real estate tax to help pay for the sanitation-the landfills fees, recycling program, trash cans and everything that's furnished to residents. This is the simplest way to do it, to put it on your real estate (tax) rather than go with a separate billing for sanitation (services).”

Most localities do charge separately for sanitation services, according to Dr. Gordon, and the Town of Farmville wants to avoid that. “We still do things to help people,” he said, “and it's all free and it creates a good image for Farmville and we want to keep it that way.”

Spates told council members the half-percent increase in the meals tax would generate approximately $182,000 more in revenue for 2011-12. The meals tax is the Town's largest revenue source.

The proposed two-cent real estate tax increase would bring in an estimated $103,000 more in revenue.

“I know some of you have probably gotten calls,” Spates told council members regarding negative reaction to the previously proposed meals tax increase to eight percent.

Spates also advised Town Council that water and sewer rates should be considered for a possible increase next year, following this year's hike. “Our water and sewer rates are extremely low. We're not keeping up with the cost of fuel. I know we increased them this past January,” he said, “but I think you need to look at some increase after January of next year.”

Town Council will reconvene next Wednesday to go over the proposed budget line by line prior to the regular May meeting.

A public hearing will subsequently be scheduled on whatever budget proposal is formally embraced by council members, who must adopt the 2011-12 budget before the end of June.