Monroe County shifts local income tax rate by a smidgen, frees up money for jail health services

On Tuesday night, Monroe County councilors enacted a change to local income tax rates that will not result in more money collected from taxpayers.

That’s because the only change is to shift one tax rate to another. But the impact of that shift will give the county about $425,000 a year in new money to spend on corrections.

How could the county council spend the money?

On Tuesday, councilor Marty Hawk pointed to some new mental health positions at the jail that have been requested by Monroe County sheriff Ruben Marté for the 2024 budget.

Those positions total $507,000, Hawk said, but the additional flexibility given by the shift in LIT would go a long way towards covering them.

The council’s action on Tuesday did not increase the overall LIT rate. The council reduced by 0.01 percent the LIT rate in a category called the special purpose LIT. But the council imposed, for the first time, a rate in the corrections LIT by a corresponding 0.01 percent.

An increase to the corrections rate could come later, once the site of a new jail is selected, its square footage is determined, and its construction cost is dialed in.

The council’s Tuesday action leaves the overall rate paid by taxpayers at 2.0350 percent, the same as it is now.

By enacting a shift of a special purpose rate to a corrections rate before Aug. 31, the county council had originally expected the flexibility to spend money in the new corrections LIT category as soon as this year.

But on Tuesday, councilor Geoff McKim reported that the initial money that is collected through the corrections rate, starting Oct. 1, will go into a trust fund, which the state uses to guarantee future distributions. If the amount in the trust fund ever exceeds 15 percent of the annual revenues, then the state makes a supplemental distribution.

In his remarks, councilor Trent Deckard thanked McKim and Hawk for working to push the shift forward.

What does the special purpose LIT pay for, and why is the county council content to reduce that funding stream?

The special purpose LIT, which is currently imposed at a rate of 0.0950, is restricted under state statute to funding “the operation and maintenance of a juvenile detention center and other facilities to provide juvenile services.” In 2023, the special purpose tax is supposed to generate about $3.9 million.

Reducing the special purpose rate by 0.01 percent, to 0.0850, will reduce the revenue for Monroe County’s juvenile division by about $424,000 a year. That will mean an annual budget deficit of about $371,000 for the juvenile division.

But as McKim pointed out at a meeting a couple of weeks ago,  it’s a deficit that could be sustained for at least a decade based on the existing operations balance in the special purpose LIT.

The fund’s year-end balance for 2022 was about $5.4 million, according to DLGF (Department of Local Government Finance) numbers.