Based on the Bloomington city council’s discussion at its committee-of-the whole meeting on Wednesday, Monroe County residents will likely see a higher local income tax (LIT) rate than the 1.345 percent they pay now.
But given the way deliberations unfolded at Wednesday’s committee meeting, the higher rate will not reflect the full amount of the 0.855 point increase that Bloomington’s mayor has pitched to them.
Adding the extra 0.855 percent would bring Monroe County’s total local income tax rate to 2.2 percent.
Some councilmembers expressed concerns about the size of the increase. But there seems to be a basic agreement on the city’s legislative body about one thing: The city of Bloomington needs additional revenue.
City controller Jeff Underwood displayed a bar chart comparing existing revenue sources to expenditures over the next four years. The bars show a deficit of around $5 million each year.
One of the needs Underwood has identified is to increase the compensation of city workers in order to stay competitive, even with other local employers, Underwood said. “We’re not losing people to Carmel—we’re losing people to Ellettsville,” he added.
During public commentary, the heads of the city’s firefighter and municipal worker unions confirmed that the city is losing people to other higher-paying jobs that are not with the city of Bloomington.
Several of the remarks from councilmembers on Wednesday seemed to coalesce around the idea of finding some rate of increase that all nine councilmembers could live with.
The LIT increase, along with two $5 million bond issuances appear on the council’s April 20 agenda for a potential vote.
Also potentially casting votes on any increase to the LIT rate are members of the Monroe County council and the Ellettsville town council. But if the Bloomington council votes with a majority of at least eight, that is enough to approve the increase.
The three councilmembers who said on Wednesday they would vote to approve the 0.855-point increase as it stands were: Matt Flaherty, Kate Rosenbarger and Jim Sims. Ron Smith said he’d vote no.
Not voting either yes or no in the straw poll were Susan Sandberg, Dave Rollo, Sue Sgambelluri.
Isabel Piedmont-Smith departed from the four-hour meeting a little bit before final commentary from councilmembers started. Steve Volan was absent.
Towards the end of the meeting on Wednesday, Flaherty said he would support the full 0.855 increase that has been requested, but he started the back-and-forth about amending the rate increase downward. Flaherty said, “In working to meet my colleagues somewhere in the middle, at the very least, I think I can come down to 0.65, and find a balance of what I think is most essential.”
Flaherty’s number didn’t get an explicit response from other councilmembers on Wednesday, but based on general comments, there’s a desire among councilmembers to get something passed sometime this spring, even if it’s not at next Wednesday’s (April 20) meeting. That’s when the public hearing is scheduled, and immediately after that, a vote could take place.
If the council wants the tax to start getting collected on Jan. 1, 2023, the council still has several months to make a decision. If an increase is adopted later than Sept. 1 but before Oct. 31, this year, then the increase would go into effect on Jan. 1, 2023.
If a LIT increase is approved before Sept. 1 this year, the residents of Monroe County will start paying the additional amount on Oct. 1 this year. [IC 6-3.6-3-3]
Corporation counsel Beth Cate told the council that if they decided to change the rate downward, they would not need to re-publish a notice of the public hearing. And they could choose on April 20 to continue their discussion to a following meeting. Cate said, “But if you are continuing discussion of the same resolution and trying to work out what the ultimate proposed ordinance would look like, I think it would rely on the earlier notice.”
The word “consensus” got mentioned at least a dozen times on Wednesday and the word “compromise” got another half-dozen mentions.
In his remarks, Jim Sims picked up on the use of “consensus” by Flaherty: “I’d sure like to get there. I think we can.” Sims added, “If we keep talking, I think we’ll be able to do a package I think we can all live with.”
Rosenbarger contrasted the current LIT proposal with previous initiatives from Hamilton’s administration. “There have been proposals that have come to us from the administration that I definitely have felt like it was surprising or shocking, or I had no input beforehand.”
About the current proposal, Rosenbarger said, “But this is something that I really appreciate just all the work the administration has done so far to include us.” She added, “I think hopefully we can all keep in mind here that this isn’t going to be something, if it passes, that is perfect for each and every one of us.”
Hamilton reacted to questions about his willingness to work with the council to amend the proposal by refining the priorities. “Whatever helps this collection to achieve consensus—through compromise and through articulation of your interests and goals—we will work with.” He wrapped up his remarks on that topic by saying, “Let’s let small “d” democracy work.”
During public commentary, from Bloomington resident Andrew Guenther the council heard support for some kind of LIT increase, but also a call for slowing down the timelines for approval.
Guenther said, “I believe that the timing of this proposal is quite awful due to the economic situation so many of our constituents face daily, between inflation and stagnant wages.” Guenther added, “I support postponing a vote on this tax until more information can be gathered and explained to the public.” He wrapped up, “But overall, I support a LIT increase.”
Guenther’s support for a LIT increase was based in part on the public safety needs that the additional LIT funding is supposed to address.
In addition to the roughly $1.5 million a year that is needed to pay for the recent police union contract, the fire department is looking at the replacement of four of its five fire stations at a cost of around $6 million each.
On Wednesday, Bloomington fire chief Jason Moore described some of the fire stations that need replacement. “I will tell you the condition that your firefighters live in is close to deplorable. And that is being very kind.” Moore added, “And those of you that have come out have seen some of the living conditions—the broken tile, the stains, the mildew, all the issues that we’ve been dealing with.”
During public comment in favor of a LIT increase was Jordan Canada, who is president of the Bloomington Metropolitan International Association of Firefighters Local 586. He told the council, “Much like the police department, we here at the fire department have been on a steady decline in our facilities, staffing and morale.” Canada told the council, “We’ve also seen a steady loss in personnel, many moving to surrounding agencies offering better pay and benefits.”
Also addressing the issue of a LIT increase during public commentary was Bradley Rushton, who is president of AFSCME Local 2487. He said the union board had not yet delved into the proposed LIT increase. But Rushton indicated he thinks it will probably pass in some form. “There are many aspects of it that sound like they are inevitable when it comes to the tax increases,” he said.
Rushton described a certain tension: “The employees who I represent are concerned not only about the cost of the increase on their labors being taxed more, but are also concerned about the ongoing efforts to increase their salaries that have steadily incapable of keeping up with the cost of living.” Rushton described the salaries of AFSCME workers as lower than average.
Solid sentiment against a LIT increase by the membership of the Greater Bloomington Chamber of Commerce was reported by president and CEO of the organization, Eric Spoonmore. He said that based on a survey, over 90 percent of chamber members do not support the income tax proposal in its current form. Chamber members also said public safety is a top priority, and that Bloomington’s law enforcement personnel do, in fact, need more resources, Spoonmore reported.
Spoonmore said the majority of chamber members are small, locally owned businesses or nonprofit employers.
When he explained why he doesn’t support the proposal in its current form, councilmember Ron Smith said, “I struggle with the overall size of the package. I’ve heard from some constituents already.” Some of the items in the package he supports 100 percent, but others he thinks are not so essential, Smith said.
In describing her current ambivalence, councilmember Sue Sgambelluri said, “Is it the right time to pass this flat tax?” On the other hand at her constituent meetings, she has never anyone say, “So you really need to get around to raising my taxes.”
Councilmember Dave Rollo said that honoring the new police union contract contract, and replacing the fire stations is ”absolutely essential”—as is making certain that the employees are sufficiently sufficiently compensated in a difficult economic time. Some of the other items in the proposal are also important, Rollo said, but they should be balanced with “a potential harm for the most vulnerable in our community.”
Councilmember Susan Sandberg said, “I will struggle with this decision, I’ve lost sleep over it, especially as the list of special projects and programs seems to grow beyond my comfort level.” Sandberg cautioned, “Every new project we add, we’ll need revenues to maintain.” She kicked out of the topic with a tagline: “We simply must restore, before we do more.”
Photos: Bloomington city council committee-of-the-whole meeting (April 13, 2022)
4 thoughts on “Upcoming local income tax negotiations could run deep, wide for Bloomington city council”
Instead of “tax and spend,” Bloomington government is spend and tax. How progressive!
The comments from the union leaders and fire chief and police chief about the inability to retain employees and the deterioration of the police and fire facilities was shocking. These were described at one point as problems of long standing. Why has the Hamiton administration been focused on bikepaths for six years and not focused on issues with essential services until now? Why even now is the LIT proposal larded with frills on top of the frilly $20 million dollar general obligation bond proposal that was also on the agenda Wednesday night?
Hi William! The general obligation bond proposals total $10M, or closer to $11 or 12M, I guess. There’s two of them at $5.8M each. The round numbers that have been used starting last fall have been two $5M bond issuances, and that has been summarized as $10M. Anyhow, in round numbers, it’s two $5M issuances, not two $10M issuances. Thanks!
Dennis the Menace, “Dad, can I have a quarter?”
“No, but here’s a dime.”
“Gee, thanks, Dad! Just what I wanted!”
“Then why didn’t you just ask for the dime?”
“Cause then you woulda only given me a nickel.”