Greenfield, Would You Pay Higher Taxes for Better Roads?

With interest rates on the decline and contractors aggressively pricing for fear of lack of work, some city officials feel Greenfield is in a position to save money now by attacking an extensive street improvement program while the getting is good.

The drawback for taxpayers, however, would be an increase in annual property taxes.

At a meeting last month, it was proposed that the city take on a two-year, $11 million street program and then take a three-year hiatus from all street reconstruction projects not funded 80 percent or better by grants.

According to minutes from that meeting, Director of Neighborhood Services Rick Sokol said now is the time to tackle the road project. The city recently refinanced some of its 2004 debt and is at or nearly at record lows for interest rates. Sokol added contractors are pricing well to maintain job security.

He said if the city borrowed the necessary funds for the project, the interest over the life of a 15-year bond would be $3.5 million at today’s rates. That same issuance at a more average interest rate of 5.5 percent, would cost nearly $2 million more.

What does it mean for the taxpayer?

One hurdle for the project would be public criticism. According to the Greenfield NOW, the 2012 budget includes a 2.15 percent property tax hike, most of which would be necessary to pay for the program.

Greenfield NOW explains with the property tax increase, a homeowner with an assessed value of $200,000 would pay approximately $34 more per year in taxes. And though new state legislation keeps municipalities from raising the tax levy to make up for the loss in state aid or revenue decreases, it does allow levies to increase to cover debt, according to the story.

Another potential hurdle would be an annual benchmark set by the Common Council years ago of $3 million per year to be used for principal and interests payments toward debt. According to Sokol, the program would require $4.2 million or $4.3 million in annual payments.

A preliminary budget, which included funding for the road project, was approved at the Committee of the Whole meeting last week and likely will be discussed at a budget hearing next month.