Poised to act Tuesday on jail: Monroe County council could adopt 0.2% tax, or re-advertise at reduced rate

A required public hearing on Monday night saw a total of 14 people weigh in on a proposed 0.2-percent local income tax (LIT) to fund the construction of a new Monroe County jail.

All but three were against imposing the tax, some strongly against, citing a range of reasons, including: a recent increase to another category of local income tax; ever increasing property taxes; skepticism about the need for a new jail as big as the 500-bed facility that some have proposed; treatment for substance use disorder as a better use of funds; and the still undecided location for a new jail.

Monroe County council could vote to impose the tax at its regular meeting on Tuesday (Sept. 17). Another option would be to scrap the current proposed jail tax rate, and to re-advertise a jail tax rate at some lower rate.

[Updated at 10 p.m. on Sept. 17, 2024. At its Tuesday meeting, the county council voted to amend the jail LIT rate to 0.175 percent and to re-advertise that rate for another  public hearing to be held on Oct. 7.]

It’s not clear that the seven-member council would have the four votes it needs to impose a 0.2-percent tax. Not able to attend the public hearing to participate in Monday’s post-hearing discussion by the council was councilor Peter Iversen.

Not yet on the council’s 5 p.m. Tuesday meeting agenda  is an item related to increasing the jail LIT.

But council president Trent Deckard indicated during discussion after Monday’s public hearing that he’s looking for the council to take action of some kind on Tuesday—either to impose the 0.2-percent tax, or reach a consensus on some lower rate.

Whatever lower rate the council might decide would need to be re-advertised for another public hearing.

There’s still enough room on the calendar for the council to hold another public hearing, and take a vote on the lower rate, in order for revenue to be collected under the new jail LIT rate starting Jan. 1, 2025. But there’s not a lot of time to spare—the council would have to act by Nov. 1, in order to start collecting the additional tax by the beginning of next year.

Background on the current 0.2-percent jail LIT proposal

The point of raising the jail LIT rate is to pay for a new jail, and possibly a co-located justice center complex, with a total construction budget of as much as $200 million.

County councilors had voted in late August to hold the Sept. 16 public hearing with an advertised rate of 0.2 percent for the jail LIT.

Also in late August, the county council voted to advertise a new, lower rate of 0.03 percent for the “special purpose” category of local income tax, which currently funds the operation and maintenance of a juvenile services center and other facilities to provide juvenile services.

The combined effect of the increase in the jail LIT and a decrease in the special purpose LIT would be an increase of 0.135 points in the local income tax paid by Monroe County residents.

County councilors are not looking to maintain the special purpose tax at just 0.03 for the longer term, because that would not be enough to fund juvenile services over the long haul.

But it would allow for the current high fund balance for the special purpose LIT to be drawn down. And the lower special purpose rate would provide a relatively lower overall rate for taxpayers, at least for a while, compared to an increase in the jail LIT rate, with no adjustment to the special purpose LIT.

It’s the same logic the council council used last year, when it established a jail LIT rate for the first time, at 0.01 percent, while reducing the special purpose LIT rate to 0.085 percent. The net effect of that move was no change to the overall income tax paid by Monroe County residents.

The rate for the special purpose LIT won’t increase in the future, unless a future council acts to increase it.

A 0.2 rate applied to a taxable income of $20,000 per year works out to $40 a year. Currently, someone with a taxable income of $20,000 a year pays $2 worth of jail tax.

Why Monroe County is planning a new jail

Weighing in at the Monday public hearing to generally support some kind of forward progress on replacing the jail was Ken Falk, who is the ACLU attorney who filed a lawsuit in 2008 against Monroe County on behalf of jail prisoners, about overcrowded conditions at the jail. The Monroe County jail operates under a settlement agreement that has been extended several times.

The current effort towards constructing a new jail, stems from two reports from consultants hired to study the local criminal justice system. The reports were delivered three years ago, in July 2021.

The reports from the two consultants—RJS Justice Services and Inclusivity Strategic Consulting—highlighted a number of challenges in Monroe County’s criminal justice system.

The key conclusion from the RJS study, which prompted the start to the recent effort was: “The jail facility is failing and cannot ensure consistent and sustainable provision of constitutional rights of incarcerated persons.”

Weighing scenarios for jail size, collocated justice facility, funding streams

One big cost factor for the project that the Monroe County council is considering is the size of the jail, defined in terms of the number of beds.

Another cost factor is whether the jail will be co-located with a justice complex, including the sheriff’s office and the courts.

Besides the jail LIT, another big source of revenue that can be tapped to fund the project is the economic development local income tax (ED LIT), which was enacted by Bloomington’s city council in 2022 at a rate of 0.69 percent.

In 2025, the ED LIT will generate about $11.7 million for the county government. A jail LIT will generate an estimated $8.5 million a year, according to the county’s long-range financial consultant, Financial Services Group (FSG).

Based on FSG’s analysis, if 20-year bonds were issued, the ED LIT revenue streams would generate $129,780,000 for construction of the project, while the jail LIT would generate $88,915,000.

After Monday’s hearing, councilor Geoff McKim presented a spreadsheet with five different scenarios, assuming different jail sizes, and assuming different amounts of additional square footage for a co-located justice complex.

One takeaway from McKim’s spreadsheet is that a 400-bed jail, with a co-located justice complex that is 50-percent bigger than the current one, could be funded by using all of the ED LIT revenue, and a jail LIT imposed at a rate of 0.15 percent (that is, 0.05 points lower than the rate currently being considered). [Shared Google Sheet of McKim’s calculations]