Sept. 10, 2018 – Town of Trenton, WI – The roads in the Town of Trenton are in dire need of significant annual maintenance work. Maintaining roads is essential in order to preserve the road in its originally constructed condition, protect adjacent resources, and provide efficient, convenient travel along the route. In addition, the condition of the road surface is an important factor in preventing automobile accidents.
Unfortunately, the budgetary funds available for annual road repair and maintenance in the Town continue to decline. Regular costs of doing business continue to increase each year by about three percent, and the levy increase allowed by the State each year is limited to the increase in new construction within the Town (about 1.0% in 2017). The only way to balance the budget for regular business is to reduce the amount of money spent on road repair and maintenance.
Fifteen to 20 years ago, maintaining one mile of road cost about $500,000. Today, the cost for the same maintenance work is over $1,000,000. The increase in road repair costs is due in part to the increase in fuel prices, which affects the cost of asphalt and other materials required for road work. These costs are prohibitive within the Town’s available budget, which forces the Board to use alternative
means to maintain the roads. This work is less costly in the short-term, but is unfortunately less effective over the long-term.
The Town is allowed to increase the levy when debt is incurred, as with the loans that were used for new snowplow equipment. In addition, the Town Board approved a short-term loan of $100,000 in 2017 to help pay for the Trading Post Trail reconstruction.
The effect of this loan on the 2017 levy was negligible, and in fact, the overall mill rate (the rate of tax per $1,000 of assessed property value) decreased. Levy increases for debt are temporary, lasting the life of the loan, whereas increasing the levy by referendum can be permanent.
Referendum Question
In the Spring Town Crier, it was mentioned that the Town Board may be asking residents to approve an increase in the levy in the near future. Because of the increased road repair needs, as well as the comments and questions received regarding road repair and maintenance, the Town Board has resolved to place a referendum question on the November 6 ballot.
The question will state: “Under state law, the increase in the levy of the Town of Trenton for the tax to be imposed for the next fiscal year, 2018, is limited to 1%, which results in a levy of $942,366. Shall the Town of Trenton be allowed to exceed this limit and increase the levy for the next fiscal year, 2019, and going forward permanently, for the purpose of improving and maintaining Town of Trenton roadways, by a total of $500,000, equating to 53.5885%, which results in a levy of $1,433,036?“
Voting “yes” means you approve the Town increasing the annual levy by $500,000 to be used for Town road repair and maintenance. Voting “no” means you do not approve the Town increasing the annual levy by $500,000 and therefore the Town will be limited to the state-imposed levy limit increase.
The levy increase referendum must be presented at a General (November) election, or at a Special Election. The Town Board decided it would be better to present it this year, rather than wait until the 2020 General Election, or spending money on a Special Election in 2019.
Effect on Property Taxes
It is important to keep the numbers in perspective. The Town levy is divided between all Town residents based on each property’s assessed value. An increase of $500,000 to the Town levy is divided among the entire equalized value in the Town ($494,447,900). This
amounts to an increased “mill rate” of 0.707526 (the rate of tax on $1,000 of assessed property value). Another item to note is that of each resident’s 2017 property tax bill, only about 18% remained with the Town, as shown in the pie chart below.
Only the portion of your property tax bill related to the Town levy would increase because of the proposed levy adjustment. Increasing the Town levy by $500,000 would cost each taxpayer about $70 per $100,000 of assessed value.
With a total assessed value of $275,000, your property tax bill would increase by less than $200. Sharing the cost of additional
roadwork in the Town through property taxes is the only way to provide our residents with properly maintained and repaired roads in a
timely manner. The levy increase would cost most Town residents less than $20 per month for improved roads in the Town!
As mentioned, the Town Board can approve borrowing funds for road repair. Loan payments are added to the levy during the term of the
loan. So, borrowing $500,000 to repair a road is paid for through property taxes, just as a permanent increase in the levy is paid for through taxes.
However, borrowing $500,000 to repair a road costs more in the end because of the interest.
The Town Board has historically chosen not to borrow money for road repair, but as the costs increase and income remains stagnant, there may be little choice if the Town is to continue maintaining its 67 miles of roadways.
Predicting the future is impossible. Inflation, state requirements, fuel costs, and new construction are all variables that affect road work
costs. One thing that is guaranteed, however, is the continued need to maintain the Town roads, and the costs associated with these repairs will likely continue to increase.
Comments and questions are always appreciated. Please contact me at 262.689.5345.
—Chairman Joseph Gonnering