Frank Miller
Columbus City Council members approved on first reading an ordinance that would result in a slight increase to one of the city’s tax rates.
In a split 5-3 vote, the council approved on first consideration re-establishing the cumulative capital development fund with a rate set at $0.05 per $100 of assessed value, the maximum allowable by state law. Council members Chris Bartels, Jay Foyst and Kent Anderson voted against the ordinance on first reading. Councilman Jerone Wood was absent.
Before voting on the ordinance itself, members approved an amendment put forward by Councilman Tom Dell that ensures the fund can only be used for public safety purposes.
The council had tabled the matter during a meeting on April 16 partly because two members— Wood and Grace Kestler— were not present, and a third, Elaine Hilber, was unable to vote due to a rule that prevents members from voting virtually on a tax increase. State law requires the fund be re-established by May 31 for the new rate to be levied in 2025.
The rate had sat at $0.0465 per $100 of assessed value for the previous three years.
The council has frequently voted to re-establish the rate in the past because the rate would often shrink on its own, necessitating another vote to re-establish the fund again to raise the rate back. Members also opted to table the first reading of the ordinance last month so they could learn more about how the fund operates.
The council last voted to re-establish the rate in 2022, but it didn’t go into effect because of legislation that amended the process for establishing or re-establishing cumulative funds.
Changes made to to Ind. Code § 6-1.1-41 ensure the rate will no longer fall in the future, so if council does decide to raise the rate, it would be the final time they would have to do so.
City officials said most taxpayers wouldn’t notice much of a difference in their bill, but several council members expressed apprehension at any raise in taxes given concerns about prices and the economy.
Increasing the rate would provide for between $175,000 and $180,000 in additional funds to go towards public safety for Columbus police and firefighters.
The rate would affect different tax cap groups differently— those with a 1% tax cap, or typical homeowners, would see “virtually no impact,” City Controller Regina McIntyre previously said, although some homeowners would pay just over $2 extra annually. The 2% tax cap group, consisting of mostly rental properties, wouldn’t be impacted at all, according to McIntrye. The 3% tax group, made up of commercial and industrial entities, would be impacted.
“For example, a company with a $20 million assessed value currently pays about $500,000 annually in property tax, the impact of re-establishing the rate to this fund would increase that by $700,” McIntyre said on April 16.
Councilman Chris Bartels said he was still concerned about the impact on the 1% tax cap group and commercial-industrial segments. He reached out to the state, he said, to learn more about why the fund’s rate shrinks.
Bartels said as property assessments go up, the cumulative capital development fund rate trends down to keep that levy stable. He also pointed to the fact that the re-established rate in 2022 didn’t go into effect.
“We’ve effectively been operating without those funds for the last couple of years, and my personal belief is, at this time with the economy we should objectively working towards a flat budget,” Bartels said.
Councilwoman Elaine Hilber said that most people would barely see an increase to what they would be paying— on a $150,000 assessed home, people would be paying an additional $2.14.
“For the city that is ($175,000) or $180,000 for public safety gear, which is like hoods for firefighters and vests for police officers and tasers and things that we are short on every year, right? We have like a six-year cycle for a lot of these items, because we can’t just replace them every year.”
Bartels said the city has been able to go without that additional money the last couple of years and made the budget work to fill those voids. He also mentioned recent efforts by the city to acquire commercial property like the former Sears building.
“If the city doesn’t acquire properties and let’s save on our tax basis, then we can use those funds to cover the public safety side of things, that’s another discussion I guess,” Bartels said.
Councilman Dell responded by saying even if the city acquires commercial property, it still pays commercial taxes.
“If it is not used for government operations purposes, it is taxed,” McIntyre clarified.
Councilman Kent Anderson said although most people would barely see the increase reflected in their bill, it “sends a really bad signal to our taxpayers.”
“I’ll be the first to say the city is under funding capital, it doesn’t take a genius to see that, but parallel to all that is we’ve made some pretty strong investments into things that weren’t necessarily mandatory,” Anderson said. “And so I think there’s a high degree of, I’ll label it discomfort or concern in the public at the level of discretionary investments we’ve made.”
Dell reiterated that public safety personnel in Columbus already “do go without things,” like equipment and a small increase would be worth it considering public safety represents part of the city that “really touches almost everyone in Columbus.”
“If we don’t buy that equipment and we put that off for future years, I don’t think we’re doing our due diligence,” Dell said.
Hilber stated that the money that would be added to the fund would not be discretionary because it’s specifically earmarked for public safety.
Bartels also posed whether the introduction of NexusPark means that more public safety funding would be required for the facility that isn’t pre-budgeted. Council President Frank Miller said there wouldn’t necessarily be a potential increase there because CRH, for example, already pays for security.
Councilman Josh Burnett had some concerns when the matter was first considered in April and had wondered if there were other avenues to derive the $175,000 to $180,000. He was comfortable voting in favor this time around because it was earmarked and after learning more about the fund, he said.
The need for public safety funding is likely going to continue trending up as the city expands, Councilwoman Grace Kestler said. Miller observed as well that things like public safety are “basics that have to be covered before we get down to other things.”
Councilman Jay Foyst again said he would not be in favor of such an increase.
“In my mind this is still— you can call it whatever you want, you can say we’ll take care of the police, we’ll take care of fire, it’s still a tax increase period, bottom line and the citizens of Columbus and every other city in Indiana, they’re dying a death of one thousand cuts. It’s only $2, it’s only $.50, it’s only $1, it’s only this, it’s only that, Oh, it’s only the rich commercial owners, it’s only people that are below $150,000. Once again, it’s a pigeonhole tax. It’s a tax increase, period. That’s the bottom line.”
A second reading on the ordinance is scheduled for May 21.
