Trustee proposes using grocery tax to seed permanent fund to offset water bills; staff to study

A Village of Oswego trustee proposed creating a permanent fund, seeded by grocery tax revenue, to generate investment income that could be used over time to reduce residents’ water bills.

Trustee Kurt proposed the idea during board remarks, describing a plan to retain grocery tax proceeds in a protected municipal fund and to use interest earnings to offset water bills for qualifying residents. “What I’m actually proposing is that we actually keep that grocery tax, and we take it and put it into a fund, and start using that tax to actually help our residents,” Trustee Kurt said. He suggested limiting eligibility by residency tenure and other criteria and said staff would need to draft code language and rules for the fund’s use.

Village finance staff agreed to evaluate the concept. Andrea, a village staff member, said the current grocery tax brings in “just over a million” dollars annually and provided a rough math example: at a 6% investment return and continued annual contributions, reaching $1.2 million in interest annually would take on the order of decades under simple assumptions. Dan, a village staff member, told the board, “we're happy to look into that and report back on April 22.”

Trustees discussed the fund’s timeline and trade-offs, noting the grocery tax proceeds currently have an allocation for water-related bonds and that changing the allocation would require policy decisions. Several trustees described the idea as worth studying but cautioned it would not be a near-term solution for rising water rates; staff agreed to bring updated financial data and analyses to the board for the April 22 meeting.

No formal motion was made to change tax policy at the March 4 meeting; instead, the board directed staff to analyze the proposal and report back with feasibility options and projected timelines.