Darien residents can expect their utility bills to jump by about $100 a year — and that won’t be the only tax increase.
The Darien City Council Monday, Oct. 5, approved a series of utility tax rate hikes as well as raising the retail sales tax rate. The city’s overall retail sales tax will increase from 8 percent to 8.25 percent, with the municipal sales tax jumping from 0.75 to 1 percent.
The utility tax increases will take place in November while the sales tax hike will be implemented in July.
By a vote of 5-2 the City Council approved increasing the village’s gas, electric and telecommunications taxes, a decision that is expected pump about $200,000 into the current fiscal year’s budget, and provide about $1.3 million more annually.
The council also approved a sales tax increase expected to provide an additional $400,000 to $500,000 annually to the city once the tax goes into effect, said City Administrator Bryon Vana.
John Poteraske, 3rd Ward alderman, and Halil Avcicq, 7th Ward alderman, voted against the increases.
“It’s not necessarily that these tax increases are not needed, it’s just the way that we are going about implementing these,” Avci said.
During a recent goal-setting session, Avci said the council agreed to discuss the budget “in the not-too-distant future.”
“I just think it would have been more appropriate to act on this at that time. I think we really did need to take a bit more time to explain this to the public and look at the options we are considering,” Avci said.
City Treasurer Michael Coren said the council needed to act quickly to counter an estimated loss of $700,000 in state revenue by the end of the 2009-10 fiscal year.
“Because many of our projects like the sidewalk program and street resurfacing program are already complete, there is no real place to make substantial cuts to make up for that loss,” Coren said.
Mayor Kathleen Weaver said the timing of the tax increases was necessary to boost revenue in the current fiscal year.
“The $220,000 we expect in revenue will only make a small dent in the $700,000 we are not going to receive from the state,” Weaver said.
The utility taxes will directly impact residents, Vana said, but the sales tax increase will be “generated by residents of all communities who spend money in Darien, not just Darien residents.”
The city’s current budget estimates sales tax revenue at about $4.3 million for 2009-10 fiscal year, a reduction of about $300,000 from last year. The city’s fiscal year runs from May 1 to April 30.
During a recent survey of other towns, Darien’s utility taxes are “far behind almost all other communities in the area,” Vana said.
“For many years we left the rate very low compared to other communities. We expect the overall dollar increase for utility taxes to be about $8 to $12 a month for homeowners,” Vana said.
