Should county officials impose a local income tax?

When one Bartholomew County Council member twice proposed a local option income tax in 2015, the concept ran into strong resistance from a majority of the seven council members.

Although Evelyn Pence, Laura DeDomenic, Jorge Morales and Bill Lentz have not publicly changed their positions, there are indications that some anti-tax attitudes may be softening in the wake of the county’s 2015 financial crisis.

Even though formal discussions of the 2017 budget won’t begin until August, the council did place discussion of a possible LOIT tax enactment on last week’s agenda.

And when LOIT champion Mark Gorbett, a council member and former two-term county sheriff, again voiced his support for what’s been commonly referred to as a public safety tax, he didn’t hear any arguments.

While Gorbett has not yet formally proposed the tax, there are some upcoming deadlines that could trigger discussion, Bartholomew County Auditor Barb Hackman said.

If approved before Aug. 31, the total county tax would be raise by .25 percentage point on Oct. 1, Hackman said. But if LOIT were approved in either September or October, it wouldn’t go into effect until Jan. 1, the auditor said.

Already levied by 19 of Indiana’s 92 counties, the tax would mean people who work in Bartholomew County and earn $35,000 a year would see an additional $1.68 every week taken from their paychecks, based on last year’s figures.

While promising to provide updated figures, Hackman said she anticipates the numbers will not change much for this year, if at all.

“(LOIT) is a perfect avenue for us, because we’re already hearing what additional money the sheriff is going to need,” said Gorbett, who served as the county’s top lawman from 2007 to 2014.

In May, Sheriff Matt Myers announced he would ask the council for funds to hire three to five additional deputies.

Doing so would fill a void that occurred when three deputies were assigned to the joint narcotics task force with Columbus police, the sheriff said.

As for two additional deputy positions, Myers said state guidelines show his department should have at least 20 more deputies than it currently employs based on the county’s population.

The local option income tax was created in Indiana primarily to increase spending for police and fire coverage.

However, passage of such a tax would not prevent county officials from redirecting money already planned for public-safety protection to serve other needs.

“We can spend it however we want,” council member Chris Ogle said.

Besides more money for county law enforcement, the council must also give serious thought to pay increases this year, Gorbett said.

In lieu of a raise this year, about 366 county employees were provided a one-time payment of $750 last winter to offset significant increases in health insurance premiums and deductibles.

While a majority of the seven-member, all-Republican county council has been reluctant to implement new taxes, other factors come into play.

While only county officials would take political heat for its enactment, the city of Columbus would receive a majority — $2,845,000, or 56 percent — of the annual revenue it generates.

County government would get about $2 million, or 40 percent, while the remainder would be split among incorporated towns such as Edinburgh and Hope.

However, interlocal agreements could be proposed to the municipalities where they would agree to give back a portion of the LOIT proceeds to the county, Hackman said.

The auditor said she has already discussed such an arrangement with Columbus Clerk-Treasurer Luann Welmer.

While council president Lentz and council member Pence also were scheduled to talk to city officials last week, he hinted neither one of them is ready to vote in favor of raising taxes.

In addition to interlocal agreements, county officials may consider taking a small amount of LOIT income from cities and towns to help pay for emergency dispatch services, Hackman said.

How local option income tax works

Type: Income tax already levied by 19 of Indiana’s 92 counties

Cost: Based on income. For an employee making $35,000 a year, the cost would be $1.68 every week.

Stated purpose: Public safety

Amount raised if enacted (based on 2015 data): Columbus, $2.84 million; Bartholomew County, $2.06 million; Edinburgh, $118,000; Hope, $29,000; Hartsville, $2,184; Clifford, $1,203; Elizabethtown, $471. Jonesville also would receive an amount appropriate for its population.

Budget timetable

In order to address a need for long-term planning, the Bartholomew County Council has already begun preliminary work to prepare for the late summer and early fall budget talks.

Under the guidance of Laura DeDomenic, council members will be meeting with county department heads from now through the end of July, council member Mark Gorbett said.

A three- to four-page survey is being used at each meeting to obtain information regarding long-term needs and expense projections, Gorbett said.

The following key dates were approved last week for the upcoming 2017 budget discussions:

  • Aug. 9: First review of proposed department budgets and estimated levy limits, as well as optional discussions with individual taxing units.
  • Aug. 16-19: Budget review with county offices and the Columbus Area Visitors & Promotion Commission. Reviews may continue the following week if needed.
  • Sept. 13: First reading of proposed 2017 budget with public hearing.
  • Oct. 11: Second reading and adoption of 2017 budget.
SHARE
Mark Webber is a reporter for The Republic. He can be reached at mwebber@therepublic.com or 812-379-5636.