Increase in cumulative capital fund gets 1st OK, but move draws criticism

THE RIGHT APPROACH?

A proposal to increase Columbus’ cumulative capital development tax rate drew criticism from several taxpayers who said the city should find money for spending needs within the city budget.

Columbus City Council voted 5 to 2 on first reading Tuesday to approve the tax rate increase, with council members Frank Miller and Laurie Booher voting no.

The proposal is to increase the tax rate from $0.0316 to the state maximum of $0.05 per $100 in assessed value. The current tax rate brings in $786,068 per year for the city — and increasing the rate would bring in $815,414.

City officials want to use the cumulative capital fund money to pay for capital expenses for the police and fire departments during the next five years.

Police Chief Jon Rohde said his department plans to replace 60 body cameras under a plan that would also provide unlimited cloud-based data storage that is estimated to cost $92,000.

In addition, the department also plans to replace 14 police vehicles that will cost $550,000 as part of a fleet-rotation cycle. The agency’s other needs include $100,000 to make the final payment of a three-year contract for portable radios, Rohde said.

The fire department has identified $880,000 in fire apparatus equipment and $325,000 in fire station alerting system software among its needs, said Jamie Brinegar, finance director for the city. The city plans to identify which items will be paid through the cumulative capital fund during the 2018 budget process, he said.

Columbus’ current cumulative capital fund has been in existence since 1987, but has not been set as the maximum level during the past 12 years, Brinegar said, adding that the Indiana Department of Local Government Finance recommends cities set the rate to the maximum level to obtain necessary revenue for capital needs.

However, the proposed increase was opposed by Columbus resident Ken Fudge.

“How’s this going to affect mom and pop businesses?” Fudge asked. “They’re going to have to pass that cost off somehow.”

If the proposed increase is approved, a homeowner with a residence assessed at $150,000 would pay an additional $13.50 in property taxes, while someone with a $200,000 home would pay about $18 more a year, Brinegar said. Taxpayers already at the maximum property tax would see no increase, however.

Russell Poling, another Columbus resident, said the property tax increase would affect many individuals in Columbus.

“Don’t raise this tax because you can,” he said.

A third resident, Glen Petrie, said the proposed hike would hurt people on fixed incomes and suggested the city should look elsewhere for the money — in what he described as bloated city budgets.

After the meeting, Miller said he voted against the proposal because of the financial impact on residents.

“Sixteen dollars here, $18 here, $10 here and it all adds up,” Miller said. “It’s the low-income and the fixed-income folks that will take the hit.”

Bartholomew County commissioners are considering establishing a cumulative capital development tax, the first new county tax since 2009 if approved.

Miller said it’s unfortunate that the county wants to establish the tax at the same time as the city, calling it a double hit for residents.

“Any budget can be scoured,” Miller said. “Can we find more money? Probably.”

City Councilman Tom Dell, who supported the ordinance, said he thinks the city is trying to fund the needs for police and fire departments in the most responsible manner, noting that no one likes seeing their taxes going up.

“I think it is prudent and I think it’s being responsible,” Dell said.

In doing so, the move will allow money to be freed up from the city’s general fund that could help fund other items that otherwise would not be funded, he said.

A final reading on the ordinance will be considered by the council June 20.

What's next

The Columbus City Council will have a final reading on an ordinance increasing the city’s cumulative capital development tax rate during its 6 p.m. meeting June 20.

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Matt Kent is a reporter for The Republic. He can be reached at 812-379-5712 or mkent@therepublic.com