> ## Content Index > Fetch the complete content index at: https://bsquarebulletin.com/llms.txt > Use this file to discover other available public pages before exploring further. # Raise taxes or tap reserves? Bloomington council weighs 911 dispatch funding gap on Monday - URL: https://bsquarebulletin.com/raise-taxes-or-tap-reserves-bloomington-council-weighs-911-dispatch-funding-gap-on-monday/ - Published: 2026-10-25T22:19:32.000Z - Updated: 2026-10-25T22:19:32.000Z - Description: Bloomington’s city council will vote Monday on a dispatch tax increase that would bring Monroe County’s overall income tax rate to 2.2419% in 2027. The proposal would close a funding gap without tapping $3.2 million in county dispatch reserves, ahead of a statewide tax overhaul in 2029. - Author: Dave Askins - Tags: Local Government, #no-inline-feature ![](https://storage.ghost.io/c/20/6f/206f9007-c0a7-47d4-b87b-686c21961f22/content/images/2026/10/PSLIT-2027-Screenshot-2026-10-25-at-5.55.52---PM-1.png) Chart by The B Square Bulletin with figures from city and county government. By the end of the Bloomington city council’s special meeting on Monday (Oct. 26), Monroe County’s local income tax rate could stand at 2.2419%, after a proposed increase in the part of the tax that pays for emergency dispatch operations. The rate currently paid by Monroe County residents is 2.14%. Earlier this year, the county council approved [an increase in the juvenile-services portion of the tax](https://bsquarebulletin.com/monroe-county-income-tax-rate-to-rise-to-2-205-in-2027/), which will bring the overall rate to 2.205% starting Jan. 1, 2027\. Monday’s proposal would add another 0.0369 percentage points, bringing the combined increase for 2027 to 0.1019 percentage points. For someone with $50,000 in annual taxable income, that would mean paying $1,120.95 in local income taxes next year, compared with $1,070 this year, which is an increase of $50.95 annually. Of that increase, $32.50 comes from the already-approved juvenile-services tax increase, and $18.45 would come from Monday’s proposed emergency dispatch increase. The public hearing and vote on the tax increase are scheduled for 6:30 p.m. Monday in Bloomington’s city hall. The specific location [listed on the agenda](https://bloomington.in.gov/onboard/meetingFiles/17673/download) is not the usual city council chambers. Instead, the meeting will be held down the hall in the McCloskey Conference Room. ### Why the dispatch tax would increase The proposed increase would go completely toward operating Monroe County’s unified emergency dispatch center, which handles emergency communications for agencies throughout the county. The existing public safety local income tax (PSLIT) rate is 0.25%. It is divided into two parts: 0.0631% for the public safety answering point (PSAP), which is the joint dispatch operation, and 0.1869% for other public safety purposes. Monday’s proposal would raise the dispatch allocation to 0.1%, while leaving the general public safety allocation unchanged. That would bring the combined PSLIT rate to 0.2869%. The money for general public safety is distributed to Bloomington, Monroe County, Ellettsville and Stinesville. Bloomington has typically used its share for police and fire equipment, vehicles, supplies and other expenses. The county has also used its share for sheriff’s deputies and jail operations. The dispatch allocation doesn’t work that way. PS-LIT revenue for dispatch goes first to Monroe County, which transfers money to Bloomington under an interlocal agreement. Bloomington operates the joint dispatch center. The [2018 interlocal agreement](https://bloomdocs.org/wp-content/uploads/simple-file-list/2018-02-07-interlocal-agreement-dispatch-Bloomington-Monroe-County-Res%5F18-03%5F-%5Fwith%5Fagreement.pdf ) explicitly allows Monroe County to hold dispatch reserves, which have accumulated to more than $3 million, according to city controller Geoff McKim. ### A gap between dispatch revenue and spending The financial challenge [presented to the PS-LIT committee](https://catstv.net/m.php?q=1632 ) in August was straightforward: The existing dispatch tax rate does not generate enough annual revenue to cover the full dispatch budget. The committee consists of four Bloomington city councilmembers, two Monroe County councilmembers, and one representative each from Ellettsville and Stinesville. The Stinesville representative serves as a nonvoting member. This year the membership was: Bloomington city councilmembers Isabel Piedmont-Smith (chair), Dave Rollo, Andy Ruff and Courtney Daily; Monroe County councilors Kate Wiltz and David Henry; Ellettsville representative Scott Oldham; and Stinesville representative Richard Carter (nonvoting). For 2026, the dispatch budget totaled [$4.51 million](https://bloomington.in.gov/onboard/meetingFiles/17673/download#page=26 ), compared to [$2.94 million](https://bloomington.in.gov/onboard/meetingFiles/17673/download#page=18) in revenue from the dispatch portion of the local income tax. That leaves a difference of about $1.57 million. Dispatch also receives money from state-distributed E911 fees collected through telephone service. Those funds are administered by the county and used for equipment rather than personnel. About [$699,000](https://bloomington.in.gov/onboard/meetingFiles/17673/download#page=3) was tapped from that source in 2026\. The city’s 2027 dispatch budget is about [$4.81 million](https://bloomington.in.gov/onboard/meetingFiles/17673/download#page=26), an increase of roughly $301,000 over the 2026 budget. Personnel expenses account for nearly all of that budget. The 2027 proposal allocates about $4.54 million to salaries, benefits and other personnel costs, with another $266,000 for supplies, services and capital expenses. It has been hard for the city to fill dispatcher positions. At the Aug. 21 committee meeting, Bloomington police chief Michael Diekhoff said at the time there were about 10 vacancies. Hiring is complicated by lengthy training requirements, limited training capacity and employee turnover. Vacancies have historically helped keep actual expenditures below the authorized budget. But they have also required existing dispatchers to work additional overtime. City controller Geoff McKim told the committee that compensation increases that were made partly due to the city’s salary study have contributed to the growing difference between revenue and budgeted expenses. ### Why not use existing reserves? The proposed tax increase would not be the only available way to bridge the dispatch funding gap. At the August committee meeting, McKim said Monroe County had accumulated about $3.2 million in reserves in its dispatch fund. Those funds are restricted to dispatch purposes. The city’s own dispatch reserves are much smaller. McKim projected that Bloomington’s balance could fall to about $245,000 at the end of 2026 if every dollar appropriated for the year were spent. But he cautioned that actual expenditures are likely to fall below appropriations because of vacancies. He estimated that as much as $700,000 in personnel appropriations could remain unspent during 2026. At the August committee meeting, McKim outlined three possible approaches to the shortfall: reduce existing salary appropriations, transfer additional county dispatch reserves to the city, or increase the tax rate. Under the second option, the county could transfer an additional $1.5 million from its existing reserves to Bloomington. McKim calculated that such a transfer would bring the city’s projected year-end 2027 balance slightly above zero, assuming full expenditure of appropriations. That option would address the immediate budgeting problem without increasing the tax, but would reduce the county’s reserves. The third option, increasing the dispatch rate to 0.1%, would generate approximately $4.9 million annually, according to an updated revenue projection McKim presented at the committee’s Aug. 21 meeting. That would be enough to cover the proposed 2027 dispatch budget, with some money potentially available to add to reserves. At the meeting, McKim explained that the county’s reserves had accumulated partly because officials had deliberately kept transfers to Bloomington below the full cost of the dispatch budget. That preserved more of the existing 0.25% public safety tax for other public safety spending. The committee voted unanimously in August to recommend the tax increase. ### Approaching 2029 statewide overhaul A big reason offered at the August committee meeting for raising the tax, instead of spending existing reserves, was uncertainty about the future. Indiana’s overhaul of the local income tax system, initially adopted in 2025 and subsequently revised by legislation in 2026, is scheduled to take effect in 2029\. Under the new framework, the familiar divisions among certified shares, economic development and public safety income taxes will be replaced by a different set of local government funding categories. At the August meeting, McKim said that increasing the dispatch tax now would allow officials to preserve reserves that might be needed during the transition. Committee members also raised concerns about keeping sufficient cash available for unexpected equipment replacement, staffing expenses and other emergencies. The county’s existing dispatch reserves would remain restricted to dispatch purposes, according to McKim’s explanation of the law. But the mechanism for generating new dispatch revenue after 2028 is not yet settled. The state’s new framework permits a general local income tax expenditure rate of up to 2.9%, with limits on how that rate can be divided among county services, municipal services, fire and emergency medical services, and other taxing units. The potential 2027 overall rate of 2.2419% is numerically 0.6581 percentage points below that 2.9% ceiling. But the two figures are not apples-to-applies. That’s because the 2027 figure includes all the existing local income tax categories, while the 2029 ceiling applies to the new expenditure tax framework, with special-purpose taxes governed separately. ### What Bloomington might want in 2029 The longer-term implications of the [2026 state legislative changes](https://www.in.gov/dor/files/legislative-synopsis-2026.pdf) have been considered by Monroe County’s Municipal Unit Strategic Taskforce (MUST), which includes financial officers from Bloomington, Ellettsville and Stinesville, along with a county council representative. At its [Sept. 18 meeting](https://bsquarebulletin.com/monroe-county-local-income-tax-group-mulls-shared-municipal-rate-approach/), the task force reviewed financial projections showing that Bloomington could have difficulty replacing its existing local income tax revenue under the new framework if it relied only on taxes paid by city residents. A model prepared by Financial Solutions Group, the county government’s financial consultant, estimated Bloomington’s 2027 local income tax revenue at $41.32 million. Adding an estimated $2.43 million loss in property tax revenue produced a target of about $43.74 million for 2029. Based on the estimated income of Bloomington residents alone, the consultant calculated that the city would need a municipal income tax rate of 1.7923% to reach that target. But the new system caps a city-only municipal rate at 1.2%. An alternative would allow Bloomington and the county’s towns to participate in a shared municipal-services tax applied countywide, including to residents of unincorporated Monroe County. Under the consultant’s model, a 1.049% shared municipal rate could generate approximately $43.75 million for Bloomington through the new distribution formula, effectively meeting the modeled revenue target. Bloomington’s own financial analysis produced a similar figure of about 1.09%. The consultant’s broader scenario, including county services, municipal services, fire and EMS, other units and the juvenile-services tax, produced an overall rate of 2.389% for 2029. That figure is 0.1471 percentage points higher than the potential 2027 rate of 2.2419%. But the consultant’s figures were illustrative, not proposed tax rates, and the model was prepared before Monday’s proposed increase. At its most recent meeting on Friday (Oct. 23), the MUST panel declined to recommend any specific 2029 rates. Instead, members [unanimously asked state lawmakers to provide more flexibility](https://bsquarebulletin.com/monroe-county-income-tax-panel-asks-state-for-flexibility-stops-short-of-suggesting-2029-rates/), citing uncertainty about future revenues, municipal boundaries and possible changes to the legislation. ### Monday’s city council vote Under the current local income tax system, changes to the public safety tax rate require approval by the Monroe County Local Income Tax Council, which consists of the county and its three municipalities. Votes are weighted by population. Bloomington holds approximately 56.7 of the 100 votes, divided among its nine city councilmembers. Under the special voting procedure that applies to tax increases, each member’s vote on Monday’s resolution counts toward the countywide decision. So nine votes in favor would be sufficient to adopt the increase without additional affirmative votes from the county or town councils. The results would then be certified to state officials. If approved, Monday’s increase would take effect Jan. 1, 2027. --- Monroe County local income tax rates 2026 actual rate compared with 2027 if the proposed dispatch increase is approved Emergency dispatch (PSAP) 2026: **0.0631%** 2027: **0.1000%** Proposed increase Juvenile services 2026: **0.0300%** 2027: **0.0950%** Increase already approved General public safety 2026: **0.1869%** 2027: **0.1869%** Property tax relief 2026: **0.0518%** 2027: **0.0518%** Economic development 2026: **0.6900%** 2027: **0.6900%** Correctional facilities (jail) 2026: **0.1700%** 2027: **0.1700%** Certified shares 2026: **0.9482%** 2027: **0.9482%** TOTAL LOCAL INCOME TAX 2026: **2.1400%** 2027: **2.2419%** The proposed total includes the juvenile-services increase already approved by the Monroe County Council and the dispatch increase scheduled for consideration on Oct. 26, 2026\. Other rates remain unchanged.