Council sets special meeting for Sept. 9, looks to vote on local income tax increase a week later

At Bloomington city council’s regular Wednesday meeting, president Steve Volan called a special meeting for next week, on Sept. 9, to consider a quarter-point increase to the local income tax across Monroe County.

The special meeting was scheduled at the request of Bloomington mayor John Hamilton, who wants the council to vote by Sept. 16.

Depending on the form of the legislation that’s put in front of the city council on Sept. 9, the nine-member group could vote the same night to impose the quarter-point income tax increase.

The intent appears to be: Wait until Sept. 16 for a vote on enactment of the tax. But if the proposal is introduced on Sept. 9 as a resolution, instead of an ordinance, a vote could be taken that same day, without any exceptional action by the council. [Added at 1:45 p.m. Sept 3, 2020: According to city council attorney, Stephen Lucas, the public hearing associated with the vote has to be noticed 10 days in advance. So the vote could not be taken, unless public notice of a hearing were given 10 days earlier.]

An increase of 0.25 points would generate around $8 million annually across the county, of which about $4 million would go to Bloomington.

What would the tax pay for?

Dating back a couple of years, one push for increasing the county income tax has come from advocates looking to expand public transit. When Hamilton suggested a 0.5-point local income tax increase on New Year’s Day this year, funding for public transit was a prominent part of the mix. Hamilton’s State of the City address in late February sketched out the possibility of increasing Bloomington Transit’s budget by 40 percent.

Increasing BT’s budget by 40-percent works out in round numbers to the better part of $4 million, or about half of the amount that the 0.5-point increase would have generated.

Public transportation no longer appears to a significant part of the mix for the 0.25-point proposal, an adjustment that came from the mayor in mid-July.

During public commentary at Wednesday’s meeting, pedestrian and public transit advocate Greg Alexander asked that the revenue from increased local income tax revenues be put towards public transit and sidewalks.

Alexander told the council to “make clear that you’re focusing the new income tax on transportation, specifically on the bus system—and gosh wouldn’t be nice if it was a little bit for sidewalks, too.” Alexander added, “Because transportation is a key, uncontroversial function of government.”

Alexander wrapped up by saying, “I just urge you to make it really clear what you want to spend the money on. And please spend the money on bike, pedestrian, bus—especially bus transport.”

Speaking on WTIU’s Noon Edition last Friday, Hamilton revealed that public buses are no longer part of his thinking for significant extra funding: “I have to say the transit system is in such tumultuous times that—how many people are riding it in their future?… So if you pull that half out [that would have gone to public transit], that leaves 0.25, which I still believe is a very important investment to move us in these directions.”

During his brief remarks at Wednesday’s city council meeting, Hamilton included basic services as part of the mix:

We need it to help our underemployed and unemployed people get back to work to help achieve a lower-carbon future with more energy efficient buildings and better transit, bike and pedestrian options. We need it to help local farmers and local artists to thrive and to help strengthen our social safety net and support more affordable housing. Indeed, we need revenues just to assure that we maintain basic services, like public safety and infrastructure, sanitation, and upkeep and maintenance in the coming years.

As for specifics, Hamilton said, “There will be more details coming to the council in the next couple of days.”

For the city council to impose the tax increase by itself, it would take at least an 8–1 majority, based on the weighting system used to tally votes on the tax council, of which the city council is one member. The others are the county council and the Ellettsville town council.

The special meeting for Sept. 9 was called by council president Steve Volan Wednesday night, after Hamilton asked the city council to schedule a special meeting for that date. Under Bloomington’s local code, the mayor could have called the special meeting himself.

Hamilton wants the council to vote by Sept. 16—apparently because it would increase the chances that the Oct. 31 statutory deadline can be met to start collecting the extra tax starting Jan. 1, 2021.

If not enough votes are achieved on Bloomington’s city council, the tax increase would need to pick up another vote somewhere else. If the vote were 7-2 on the city council, and 1–6 on the county council, the arithmetic would let the tax increase squeak past.

The other members of the tax council are forced, by the procedures laid out in the state statute, to vote within 40 days of the city council’s vote. A Sept. 16 city council vote would force the votes of other jurisdictions to come before Oct. 31.

At Wednesday’s meeting, Volan said that because the needed action to increase the income tax can be accomplished under the state tax law by a resolution, instead of an ordinance, the administration could have waited to put the resolution in front of the council on Sept. 16 for a vote that same night.

Under state law, ordinances cannot be enacted by a city council at the same meeting on the same day as they are introduced—unless the council unanimously consents to consider the ordinance on an accelerated timeframe.

Resolutions don’t have the same requirements as ordinances.

Volan said, “I will say that the administration always has the prerogative to bring resolutions to the council. A resolution only requires one meeting. So they could have brought this resolution on the 16th, without any special dispensation.” Volan added, “Because I believe that the council was going to want to discuss it at length, I concur that a special session is worth calling on the 9th.”

Under state law and local code, if the legislation that is introduced on Sept. 9 is a resolution, and not an ordinance, then the council could vote to enact it that same day. [Added at 1:45 p.m. Sept 3, 2020: According to city council attorney, Stephen Lucas, the public hearing associated with the vote has to be noticed 10 days in advance. So the vote could not be taken, unless public notice of a hearing were given 10 days earlier.]

Another option would be to include a resolution as a point of information in the meeting packet and schedule a discussion, without formally introducing it.

The city council has a work session scheduled for Friday (Sept. 4) at noon.

[Additional background here: Analysis | From transit, to climate, to basic services: A changing trajectory for Bloomington’s income tax proposal]