County council mulls taxes: Officials reluctant to take advice on increasing revenue

Bold steps that include enacting a new tax, raising existing ones and borrowing $10 million by issuing additional bonds were recommended by financial consultants to the Bartholomew County Council.

But during Monday’s special meeting, most elected officials expressed reluctance to support the recommendations by two representatives of H.J. Umbaugh and Associates of Indianapolis.

The council did unanimously vote to advertise a July 3 public hearing to consider a new cumulative capital development tax, agreeing to an advertised rate of .0167 cents per $100 of assessed valuation for 2018.

The state recommends that the county double that rate in subsequent years. But while that possibility will be mentioned in advertisements, there seemed little desire among council members to double the tax rate in two years.

Instead, members seemed to just want to get back $698,053 lost this year due to a change in state law that reduces income to counties that have not enacted the proposed tax, Bartholomew County Auditor Barb Hackman said.

“Having this new tax revenue-neutral makes sense,” County Treasurer Pia O’Connor told the council. “Because what I don’t understand is how we’re broke as a county, but as a whole our property taxes went down this year.”

The council’s action Monday does not address funding requirements of projects the Bartholomew County Commissioners have deemed as necessary. Those projects, as well as their three-year funding levels, include:

$5 million for a new highway garage.

$4.5 million for building maintenance and improvements.

$4.2 million for inflation, contingencies and reserves.

$3 million for courthouse renovations.

“I don’t think they solved anything,” commissioners chairman Carl Lienhoop said as he left the council chambers.

The timing of Umbaugh’s proposal was on the minds of a number of council members Monday.

Councilman Bill Lentz noted that July 1, Hoosiers will begin paying dozens of new state taxes and fees that includes a 10-cent-per-gallon gas tax hike and a $15 increase in vehicle registration fees.

“I think two (new local) taxes would be suicidal,” Lentz said.

The suggestion of borrowing money through issuance of new bonds also did not set well with the elected officials.

Councilman Jorge Morales reminded Umbaugh consultants Dan Hedden and Jason Semler that local taxpayers still are making payments on a 2006 jail expansion bond.

Nevertheless, most council members said they recognize that current revenue trends won’t meet the county’s financial needs. In addition, both Morales and Councilman Mark Gorbett pointed out that Umbaugh’s plan does not cover expenses that include a dozen new employees required mostly by the courts and sheriff’s department.

Other unaddressed needs mentioned Monday include two-way radios and body cameras needed for deputies and emergency responders, as well as funding to address substance abuse issues.

“We can’t close our eyes to certain officeholders’ needs,” said Gorbett, a longtime proponent of a public safety tax. “Not wants, needs.”

Describing the revenue generated from the proposed tax as insufficient, Gorbett said he would prefer substantial increases in local income tax rates to address current and long-term goals, instead of the proposed tax.

Increasing local income taxes would largely place the financial burden on wage earners, rather than property owners or retirees, Morales said.

About the cumulative capital development tax

Proceeds from a cumulative capital development tax can be used to purchase, construct, equip, maintain or repair county buildings.  The money also can be used to acquire land and make improvements necessary to create public facilities.

A property owner with a home assessed at $100,000 who takes normal deductions would pay an additional $5.44 a year if a cumulative capital development tax were enacted at the level recommended by the state.

For owners of a residence assessed at $200,000, the tax liability would be $16.26 annually.

However, the tax rate being advertised for Bartholomew County is about half that amount.

A public hearing on the proposed tax is scheduled for 6 p.m. on July 3 on the fourth floor of the Bartholomew County Governmental Office Building, located at Third and Franklin streets.

Author photo
Mark Webber is a reporter for The Republic. He can be reached at mwebber@therepublic.com or 812-379-5636.