[ back ]
Inheritance taxes going fast in Gates Mills
(by Sue Reid - September 03, 2008)
Inheritance taxes going fast in Gates Mills
By SUE REID
Although the Village of Gates Mills budgets $350,000 each year in inheritance tax receipts, money is going faster than it is coming in, village Finance Manager JoAnn Lechman said.
Her comments followed a recent Village Council meeting in which ways to address the failures in March and August of a levy for streets, roads and bridges were discussed. The village's projections in the area of inheritance tax were included in that discussion.
Mrs. Lechman explained that, while the village's inheritance tax is used for reconstruction of roads, culverts and bridges, it also is earmarked for other large village projects, including the purchase of the downtown land. "It is used for roads, but it's going quickly," she said.
Gates Mills has averaged a little over $500,000 each year between 1981 and 2007 in inheritance taxes. So far this year, it has received $400,000, Mrs. Lechman said.
The village's inheritance-tax collections were $91,109 in 2003, $774,948 in 2004, $1.414 million in 2005, $449,456 in 2006 and $1.097 million in 2007.
Mrs. Lechman said the village is expecting a shortfall, because expenses are increasing, and the amount of inheritance-tax income is unknown. "That's how we fall behind," she said. "We forecasted projects we knew about and realized it would run out." The levy projections were needed in order to keep the village liquid, she said.
The village decided to place its inheritance-tax money in the capital-improvement fund, Mrs. Lechman said. "That is designed to do what we consider only large projects."
One such project beginning in 2000 to 2002 was the purchase of land for the downtown project, amounting to a little over $2 million. That inheritance-tax money had been saved up since 1981, when the village began collecting it, Mrs. Lechman said. "That took the big hunk out."
Another large amount went for a waste-water-treatment plant over a five-year period from 1996 to 2001 for the downtown area, costing $836,000.
At one time, the village had expected to add another building to its downtown. "We're not planning on doing that at all," Mrs. Lechman said. "We don't have the money or the need."
Examples of other projects that used capital-improvement funds between 1996 and 2006 include: $1.485 million for roads and culverts; $230,100 for a firetruck; $124,270 for an ambulance; $547,365 for the post office expansion; $398,000 for the triangle property purchase near Gates Mills Boulevard and SOM Center Road (Route 91); $325,364 for the service-garage expansion; $835,074 for the downtown parking lot, sidewalks and lighting; $82,200 for a historic wash house at Old Mill and Chagrin River roads; and $585,574 for waterlines.
During the same period, an additional $2 million was spent on roads and culverts from the street-construction fund, which came from a loan. "Therefore, during those 10 years, almost $3.5 million was spent on major road and culvert work," Mrs. Lehcman said.
Council plans to continue discussion of the forecasted shortfall at its November meeting. A meeting of the financial projection subcommittee is at 4 p.m. Sept. 16 at Village Hall.
[ back ]
