The Bartholomew County Commissioners gave approval to an ordinance that creates an account to hold revenue from a proposed Cumulative Capital Development Tax.
No opposition was voiced during Monday’s commissioners meeting, when approval was given.
The Bartholomew County Council was scheduled to meet in special session Monday night to begin discussions on the matter. It is the council, rather than the commissioners, that must approve a new tax and set the rate, Bartholomew County Attorney Grant Tucker said.
While most council members have taken a staunch anti-tax stand for several years, they began pressuring the commissioners last summer to take initial steps to create the tax last summer after learning they would lose $670,000 annually in previously allocated funding from the state unless the new tax was approved.
Under state recommendations, a property owner with a home assessed at $100,000 who takes normal deductions would pay an additional $5.44 a year, Bartholomew County Auditor Barb Hackman said. For owners of a residence assessed at $200,000, the tax liability would be $16.26 annually, she said.
That would be followed by up to .033 cents annually — double the amount — in subsequent years, creating between $1.2 million and $1.3 million in additional revenue, the auditor said.
It was a 2015 legislative change from the Indiana General Assembly that resulted in the loss of that general fund money until the county enacts this specific tax, Tucker said.
“It strikes me the legislature is trying to force local governments to post their own taxes,” Tucker said. “I guess one can argue that’s better than having the state decide everything for everyone.”
“There’s just a little more level of accountability by all units of government trying to be as transparent as truly possible,” commissioners chairman Carl Lienhoop said.
But for county council member Bill Lentz, a key question is whether the money the county has lost is being pocketed by the state, or given back to Hoosiers in tax relief, he said.
Although Hackman said there was insufficient information to immediately answer Lentz’s question, she agreed to look into the matter.
A final vote on the tax by the county council is still several weeks away.
The county council is required to hold at least two public hearings prior to approving the tax and the rate. Taxpayers must have given at least 30 days to file an objection during the process.
But the county must complete the process, approve the tax on two readings, and submit the paperwork to the state no later than Aug. 1 in order for the tax to go into effect next year, Tucker said.
If approved, proceeds can be used to purchase, construct, equip, maintain or repair county buildings, Lienhoop said.
The money also can be used to acquire land and make improvements necessary to create public facilities, he said.
Two weeks ago, the commissioners declined to insert language suggested by county council president Laura DeDomenic that would specifically allow the county to purchase motorized vehicles with those monies.
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Under state statute, the following process must be taken by the Bartholomew County Council before a cumulative capital development fund and subsequent tax rate can be established in 2018.
- Advertise a public hearing at least 10 days before the meeting.
- Advertise a public hearing seven days after the first advertisement and at least three days before the meeting.
- Hold the public hearing. Adopt an ordinance to establish the rate and reason for the fund.
- If adopted, advertise the adoption within 30 days of the meeting.
- Taxpayers have until noon, 30 days after the adoption publication to file an objection.
- The entire process must be completed, all votes taken, and all paperwork submitted to the Indiana Department of Local Government Financing no later than Aug. 1.
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