During a speech on Thursday night, billed as a “state of the city” address, Bloomington mayor John Hamilton put the first half hour into a celebration of the city’s accomplishments dating to 2017 and earlier.
That was the windup to three more pragmatic points.
Hamilton said that for “Democrats who want to get things done,” there are three points of alignment: climate action; diversity and equity; and new revenue.
On those three elements, Hamilton said, “We need to align, to go forward together.” That was the title of his speech: “Forward Together.”
He quickly added, “Now, tonight is not for all the details.”
In his Thursday speech, Hamilton did not float a specific proposal for a local income tax. After the speech, Hamilton was firm if friendly, when pressed by The B Square, about not naming an amount, or a range, for a possible tax increase.
On the topic of diversity, Hamilton pointed in his speech to planned partnerships with the city’s largest employer. “Indiana University and the city are already in the process of creating a [diversity, equity, and inclusion] coalition to reflect, strategize and plan for the most innovative and creative solutions for creating a truly inclusive community,” Hamilton said.
On the topic of climate action, Hamilton said a mechanism is needed to help Bloomington make progress in that area—a “green ribbon panel.” He described the panel as a “community-wide task force to develop specific action steps on solar energy, transportation changes, city planning, and supportive grants.”
Hamilton also called on the city council to consider changes to local law, like restricting two-cycle engines or mandating disclosures on building energy use.
Hamilton had first floated the idea of a “green ribbon panel” over two years ago, in a speech given on New Year’s Day 2020. On that occasion, he connected the formation of such a group to an increase in the countywide income tax.
The focus of the local income tax increase, as first proposed in 2020, was on funding for climate action initiatives. The initial proposal was for a half-point increase, which was reduced to a quarter point by the fall. The reduction in the proposed increase was one of the impacts of the COVID-19 pandemic.
By the fall of 2020, when the council was to vote on the tax, the focus was broader than just climate action. At a city council work session leading up to the vote, then-deputy mayor Mick Renneisen told the council, “Without the additional revenue, we won’t be keeping the lights on and not doing many of the investments in our community that I know you all would like to make.”
In fall 2020, local income tax was rejected by the city council on a 4–5 vote. It was not the same 4–5 split that has become familiar in the last few months. In 2020, the four votes in favor of the local income tax increase came from Dave Rollo, Matt Flaherty, Kate Rosenbarger and Steve Volan. Voting against the proposal were Ron Smith, Isabel Piedmont-Smith, Susan Sandberg, Sue Sgambelluri, and Jim Sims.
The third of Hamilton’s pragmatic points during Thursday’s speech was the need for new revenue.
“We need to talk about resources for our community—new revenue,” Hamilton said. The need for new revenue was not tied just to climate action.
The first area listed out by Hamilton as requiring additional revenue was public safety. “We need major investments in public safety, ongoing revenue for adequate police salaries as city council directed last year, and as our proposed four-year labor agreement has included.” To the list of public safety needs, Hamilton added police and fire facilities damaged in the June 2021 flooding.
Employee compensation generally, not just in the public safety sector, needs new revenue, Hamilton said. “We expect to see increased pressures on many of our city occupations and employees from the ‘Great Resignation,’ and private competition.”
Hamilton said additional revenue is needed just to maintain current facilities. “We also need major ongoing investments just to maintain all that we have, from physical facilities to IT infrastructure and cybersecurity,” Hamilton said.
Other areas need additional financial support from new revenue, Hamilton said. “We need major ongoing investments in enhancing our quality of life, more affordable housing, both rental and ownership, and help for people to get those better jobs through training and apprenticeship and skills coaching,” Hamilton said.
Climate action was included in the mix of expenditure areas to be supported by new revenue. “We need major investments in climate related challenges, from more and better transit options, to more renewable energy and greater energy efficiencies, to better manage our waste and better plan our housing patterns.”
The mechanisms identified by Hamilton on Thursday to generate new revenue were issuing bonds and increasing the countywide local income tax.
In the state of Indiana, local income taxes apply county by county. It’s not currently an option for a city to enact a local income tax.
Approval from the city council will be required for either mechanism.
In the case of a local income tax, the county council and Ellettsville town council also have a say, but the Bloomington city council has a majority of the 100 votes—which are distributed based on population. Bloomington’s share, based on the 2020 census, is about 56 percent. That’s down from 58 percent as measured in the census from 10 years earlier.
Last fall, Hamilton persuaded the council to pass the 2022 budget by saying he would request the issuance of $10 million in bonds. The idea is to ask the council to approve $10 million in bonds, every five years.
On Thursday, Hamilton said, “I look forward to continuing to work closely with city council in the coming weeks—the discussions have already begun—both about the upcoming potential bonding and potential new revenue from our local income tax.” Hamilton called those two options “really our only feasible options under state law.”
The current local income tax rate for Monroe County is 1.3450 percent. Adding a half point would make it 1.8450 percent.
How much would a half-point increase in the countywide local income tax generate for all local units in Monroe County?
Based on the most recent numbers for existing local income tax revenue, an increase of 0.50 points would generate an additional $18 million per year, to be divided by Bloomington, Monroe County government, Ellettsville, and Stinesville.
If the “property tax footprint” method of distribution were used to divide up the money, Bloomington’s share would work out to 51.2 percent of it, or about $9.25 million a year.