An ordinance that would increase the county’s local income tax by 40 percent will be presented to the Bartholomew County Council next month.
If approved at the current rate, individuals making $50,000 a year would see their local income tax go up by $4.80 a week or $250 a year, according to an estimate by Auditor Barb Hackman.
But councilman Bill Lentz said he anticipates there will be efforts to lower the proposed tax rate of 1.75 percent of gross pay before a final vote is taken in October. The current rate is 1.25 percent.
On a motion by Jorge Morales and seconded by Mark Gorbett, the council voted to have the ordinance prepared and presented for consideration at its Sept. 12 meeting, starting at 6 p.m. A public hearing will be conducted that evening, Hackman said. If passed, it would take a second vote to finalize the action.
Council members Gorbett, Chris Ogle and Laura DeDomenic supported Morales’ proposal, while Lentz and Matt Miller voted against it. Evelyn Pence abstained from voting.
Since taking office in 2011, Morales has established himself as a staunch fiscal conservative and efficiency advocate.
“I prayed a lot, and thought about the county’s future for a long time,” he said. “I still don’t like new taxes, and I wish we could find another solution.”
The action came just after the council met to discuss next year’s budget with the three county commissioners that Morales made the motion to put the tax proposal on next month’s agenda, along with the first reading of the 2018 general fund budget.
Five days earlier, Sheriff Matt Myers presented the council with a combined $7.2 million jail and law enforcement budget for next year. His proposed spending plan calls for nearly $1 million in additional funding when compared to the approved 2017 budget.
As of Wednesday, the council had cut about $8 million from the $31.1 million requested by various departments, Morales said.
“But over the years, we have cut operational expenses to the bone,” Morales said. “There’s a point where you can’t do more without reducing people and services, and that is unacceptable.”
If approved, an additional $4.8 million would be raised annually for the county, while the city would receive $6 million, Morales said.
While Morales said the impact of the opioid crisis is a priority for the community, it was a wide variety of financial demands from various county departments that finally prompted him to propose the tax increase.
Those demands include millions of dollars needed for a new county highway garage, extensive courthouse renovations, and additional expenses incurred by a number of divisions within the county’s criminal justice system, Morales said.
In contrast to increasing property taxes, an increase in local income taxes would be less of a burden on low-income families, Morales said.
If initial approval is given to the tax increase next month, the second and final vote would take place Oct. 10, Hackman said. That’s the same day the council is scheduled to conduct its final vote and adoption of next year’s spending plan.
Two votes by the Bartholomew County Council, as well as a public hearing, are required to raise the county’s local income tax rate from 1.25 percent to 1.75 percent of gross pay.
The council has chosen to vote on the tax the same two evenings it will be casting votes on the 2018 county government budget.
The public hearing regarding the tax increase will be at 6 p.m. Sept. 12 in the council’s fourth-floor chambers in the Bartholomew County Governmental Office Building at the corner of Third and Lafayette streets.
If approved at that time, the second and final vote would take place Oct. 10.