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Redirection of tax would keep city in the black

Issue 5

What: A street improvement replacement levy

Duration: 10 years

How much it would raise: $2 million

Purpose: Voters are being asked to replace the existing street improvement levy with a new one that allows for some of the money raised to be placed in the general fund to cover city operations.

Cost: An average $300 to $400 a year per taxpayer — no additional expense to what is already being paid.

Steve Fogarty

The Chronicle-Telegram

AMHERST — Voters here are being asked to re-direct half of an existing half-percent income tax to keep the city in the black when they go to the polls Nov. 3.

If residents approve Issue 5, it will allow the city to re-direct 50 percent of the existing half-percent income tax into the general fund. The issue calls for no increase in taxes. Residents will continue to pay the same $300 to $400 average annual tax they have been paying in the past, Mayor David Taylor said.

This re-distribution of money is needed to stave off a projected $1 million deficit by the end of 2010, Taylor said.

“We’re mostly a bedroom community, and we just don’t have a large industrial or business tax base to draw from,” he said.

The replacement issue will generate $1 million for the general fund and $1 million for the street fund.

Failure to OK the re-direction of tax money could lead to reduced services, the city being placed on fiscal watch by the state, or layoffs, which the city has been able to avoid.

The street levy is set to expire in 2010. City officials realized it would be extremely tough to ask voters to up their own taxes while the economy continues to struggle.

The city’s financial picture is compounded by the fact that only 18 percent of city residents — those who work in Amherst — pay a 1 percent income tax into the general fund, while 100 percent of residents pay into the street fund.

The remaining 82 percent of residents who work outside the city do not pay the 1 percent Amherst income tax; instead, they pay income taxes to communities they work in, Auditor David Kukucka said.

The city’s general fund typically stands at $5.2 million a year. Of that total, approximately $3.1 million funds the city’s police and fire departments and city services. Just like most cities, Amherst has had to deal with boosts in overall costs, as well as hikes in contracts for safety forces and city workers, while interest on investments has dropped from around $1 million to an estimated $350,000.

Contact Steve Fogarty at 329-7146 or

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