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Paonia voters will decide sales tax hike in April

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Paonia voters will be asked to consider a sales tax increase next April. At the Dec. 12 board meeting, trustees approved language for "Ballot Question #1," a proposed 1 percent increase in local sales taxes. If approved by voters, revenue would go to the town's general fund.

Paonia currently collects total sales taxes of 6.9 percent -- 2.9 percent state tax, 2 percent county tax and 2 percent in local sales tax. Of the 2 percent in local taxes collected, half is allocated to the general fund and half to the capital improvement fund. Based on the current tax rate, the town projects fiscal year 2018 local sales tax revenues of $275,000.

Ballot language caps increased annual revenue at $150,000. That's a high estimate, said town attorney Bo Nerlin. But if the town under-estimates the first-year revenue, the balance, under the Taxpayers Bill of Rights (TABOR) would have to be re-funded to taxpayers.

The 2018 budget, which was approved at the meeting, has been summed up as "extremely lean." To balance the budget, trustees cut more than $160,000 from the general fund, including a $42,000 parks maintenance contract and proposed staff pay increases.

Trustees Bill Bear and David Bradford have urged the board to consider allocating the proposed sales tax to street repairs. "I pushed very hard for this 1 percent, for that specific purpose," said Bradford. He said the town would have a better chance of selling the idea to voters if they knew it would help fix the streets. "If we don't tie it to street repairs, I'm not very comfortable with this proposed resolution."

The town's budgetary problems "go beyond streets" said Mayor Charles Stewart. Fixing the streets is "a very expensive proposition" that will require other options such as grants. The general fund, however, is what keeps the town operating and pays staff salaries. Stewart reminded the board that two police officers recently accepted better paying positions elsewhere. "The reality is, we need money going into the general fund for the town to operate efficiently."

Town treasurer Ross King said he was "uncomfortable" with tying future revenues to streets, and Stewart and town administrator Ken Knight urged trustees to consider what future boards will face and not tie their hands. While future boards could approve allocation of general fund money for streets, election results can only be changed by another election, said Knight.

The 2018 biennial election is scheduled for April 3.

Trustees also:

• Approved resolutions adopting the 2018 budget and setting the 2017 property tax at 8.322 mills. The final draft budget can be reviewed at Town Hall, or online at townofpaonia.com under the "Government" tab;

• Adopted on second reading Ordinance 2017-12, regulating the possession of marijuana within town limits; and

• Awarded a contract for engineering for the proposed sewer line from the Samuel Wade Bridge to Highway 133 to SGM. The Glenwood Springs-based engineering firm, which has contracted with the town on other projects, was one of four firms to submit bids. SGM's bid of $56,890, discounted from $62,662 if all three phases of the project are awarded under one bid, was about $10,000 lower than the next lowest bid submitted by High Country Engineering.

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