RIVERTON — Hard times have fallen on Riverton.

Like many other cities feeling the crunch of a faltering economy and skyrocketing fuel prices, Riverton is considering increasing property taxes by more than 200 percent to fill a gap in the city's revenue caused by evaporating new construction.

Mayor Bill Applegarth trimmed about $700,000 from the 2007-08 budget, and five city employees — including the public works director — have been laid off, but still, the city needs an additional $1 million in revenue, Applegarth says. The city currently receives about $460,000 in property-tax revenue, which is roughly 2 percent of the total tax bill property owners in Riverton pay.

"Our problem isn't expenditures, it's revenue stream," Applegarth said. "We've had, in the past, a high building rate of residents. The last fiscal year we were right around 1,000 residential building permits for the year. This year we'll be right around 100 building permits. You can see that revenue stream has dropped a great deal."

The city's projections for sales-tax revenue is $700,000 short, and the city is running on a loss of about $1.5 million in new construction fees from its 2006-07 budget. All but $800,000 of the city's rainy day fund has been tapped to supplement the 2007-08 budget, and Applegarth says he doesn't want to deplete those funds any further.

The city commissioned a survey of 454 Riverton residents in April to gauge how receptive residents would be to a potential tax increase of about $8 a month — or $96 a year, for an average home valued at about $330,000 — on the city portion of property owners' property-tax bill. About 59 percent of residents polled in the survey said they would be willing to pay the increase to keep the same level of city services, including 6 percent who said they would pay the increase if no other sources of revenue could be found.

Applegarth is quick to point out that Riverton residents pay some of the lowest property taxes in the state — even if the increase is approved the city will still be lower than most of its neighbors — and he is emphatic that he hates suggesting raising taxes, but the mayor is comforted by the statistics of the survey.

"If I had not had the support of the people to increase property taxes I never would have taken that budget to the council," Applegarth said. "We're dealing with the people's money and people need to make decisions on how they feel about services. ... If (the survey) had come back that over 50 percent of us wanted to cut services, that's what my budget would have reflected."

Some residents are skeptical that a majority of residents would support such a dramatic tax increase — and that the city really needs the revenue. Resident Bill Cox says he thinks the survey of 454 residents was misleading and manipulative. His wife was one of the 454 polled, but he does not support a 230 percent increase.

"With the economy being so bad, I don't think it's the best idea," Cox said. "I think operations need to pull back. If they can't cover costs for essential city services, then they should go to the residents. But a 300 percent increase at once? That's a lot."

The city will have one more public hearing on Aug. 12 before the new tax rate is approved by the city. In the meantime, each property owner should receive a property-tax notice in early August detailing how much the increase would cost them.

Former City Councilwoman Lisa Mariano says she can see how the increase will hurt, but she understands why the city would need to raise the tax.

"In terms of percentage, (the tax increase) looks huge, but in terms of money, that's the least of my worries," Mariano said. "I know no one wants to pay more than they have to right now, everything is tight, but everything is tight all the way around, and it's tight on the council, too."


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