Indian Lake considering lowering taxes -- again
Indian Lake Borough residents could see their second tax decrease in two years as council members weigh their financial options.
Council members discussed options Wednesday to either pay off the borough’s debt or lower taxes. Council members lowered the property tax rate by 3 mills in the 2018 budget, bringing it to 16.3 mills.
Council member Bob Hanson said there are at least three major options council members could choose from for the 2019 budget.
“We could leave taxes high and get debt-free fast; we could lower taxes a little bit and get debt-free on a slightly longer period of time, or we could lower taxes a lot and extend the debt out to 30 years,” he said.
If the council leaves the taxes the same, the borough could pay off its debt in about three to five years.
Once the borough is debt-free, Hanson said, it could potentially lower taxes by 9 mills.
“If we pay down the debt very quickly, then current homeowners are the ones paying the high taxes and paying the bill,” he said. “If we extend the debt out 30 years, then the elderly current homeowner won’t be the one paying the bill 20 years from now.”
Hanson said he would suggest lowering taxes between 3 and 5 mills for next year while still paying off the debt. This plan would extend the loan payment out to about 10 to 15 years.
“My gut feel is that I would want to propose a little bit of both,” he said.
The borough lowered taxes last year because a 2013 dam remediation project cost less than expected and the borough received reduced interest rates on the loans it took out. The project was estimated to cost $7.5 million but was completed under budget at $7 million.
“Since that time we have been aggressively paying down the debt and building our cash reserves,” Hanson said.
Hanson added that the borough paid off one of its loans and has $1 million in debt.
Council members are planning to survey borough residents to see what there opinions are on the three options.
“I think we are going to get a mixture of responses, but then the council can better assess what the residents think,” Mayor Michael Miscoe said during the meeting.
Realtor Don Reed said Wednesday that every customer he talks to about the borough lowering taxes has offered a positive response. He said the amount of the reduction doesn’t matter as much as the concept.
“I don’t think it’s as important to the people that it was 3 mills,” he said. “The concept of the borough lowering its taxes is unheard of.”