But since 2006, a ballot measure has allowed voters to temporarily reduce the general purpose rate to 4.5 percent for a four-year period, and that's its current rate.
Without action from the council, the general purpose tax would automatically return to 5.5 percent on June 30, when the most recent cycle ends.
At the Jan. 10 meeting, the council debated various ways to approach the tax, Town Manager Jeremy Dennis told the Almanac. Options included a ballot measure that would permanently reduce the rate to 4.5 percent or lower, an alternative measure that would continue the same four-year voting cycle, or a measure allowing for a yearly council decision on the rate, as recommended by the Finance Committee.
The council on Jan. 10 reviewed an analysis of appropriation limits for the next five years, which predicted that the town will remain under its limits during that time. The four-year cycle had been set in accordance with an appropriation waiver, but based on projections, the town will not require one in future years.
The Finance Committee's recommendation was based on the idea that the council would assess the UUT on a year-by-year basis. Such a move would allow for "flexibility and prudence," the committee's chair said during the meeting, but some council members worried that future councils could use the wiggle room to eradicate the tax or raise it unnecessarily. Mr. Dennis said that council members ultimately felt that the 4.5 percent rate had been well-tested and found appropriate for budgetary purposes in past years, and residents also feel comfortable with it.
Currently, the general purpose UUT provides around $550,000 per year — or 13 percent of the town's general spending revenue, supporting "a number of essential services including augmented law enforcement services and infrastructure improvements," according to the town's website.
The open space UUT, which is a separate tax, provides about $245,000 to a fund that supports the acquisition and maintenance of open space in the town.
Instead of reassessing the tax annually or introducing a ballot measure every four years, the council directed staff to craft a ballot measure that will set the general purpose rate at 4.5 percent with no expiration date. A proposal to place a measure on the June ballot is scheduled to be considered by the council at its Jan. 24 meeting.
"I think one of the things we're able to do here is make it less complicated — there's clarity in where we are moving forward — as well as assurance that the finances of the town are in good shape," Mr. Dennis said.
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