Bloomington area budget prep: Income tax revenues for 2023 projected up 13%, property tax levy up 5%

Indiana’s state budget agency has released its estimated county-by-county local income tax (LIT) distributions for 2023, which are numbers local governmental units will use for 2023 budget planning.

For the certified shares category, Monroe County (across all government units) is projected to see about a 13-percent increase—from $34,232,607 in 2022 to $38,815,238 in 2023.

That news comes shortly after the maximum levy growth quotient for property tax revenue was announced for the 2023 budget year: 5 percent.  That’s the biggest percentage increase since at least as far back as 2003. Continue reading “Bloomington area budget prep: Income tax revenues for 2023 projected up 13%, property tax levy up 5%”

Local income tax increase: Decision delayed by Bloomington city council to May 4

On Wednesday night, Bloomington’s city council voted 8–0 to postpone consideration of a countywide local income tax increase until its next regular meeting, which is scheduled for May 4.

The vote to postpone came a few minutes after 9 p.m. That made for a meeting that lasted about two and a half hours. Councilmembers asked questions of the mayor and staff, heard another round of public commentary, and discussed the proposal among themselves.

It’s the city council’s second postponement of the LIT rate increase in as many weeks. The likely delay in the vote this week was announced by council president Susan Sandberg at the start of Wednesday’s meeting. Continue reading “Local income tax increase: Decision delayed by Bloomington city council to May 4”

Analysis: Bloomington city council to take up local income tax increase again this Wednesday

The sole item on this Wednesday’s special meeting of the Bloomington city council is a proposal to increase the countywide income tax by 0.855 points, which would bring Monroe County’s total rate to 2.2 percent.

Bloomington mayor John Hamilton re-floated the idea of a local income tax increase at his “state of the city” address this February. It was an idea he had unsuccessfully pitched in 2020. The mayor gave details of this year’s proposal in early April.

If the city council approves a LIT rate increase by a vote of at least 8–1, that will increase the tax for all residents of Monroe County. If the approval gets fewer than eight votes from the Bloomington city council, then the proposal would need to pick up some support from county councilors and/or members of the Ellettsville town council. Continue reading “Analysis: Bloomington city council to take up local income tax increase again this Wednesday”

Local income tax increase postponed by Bloomington city council until April 27, but $11.6M in bonds OK’d

Bloomington’s city council has postponed its decision on an increase to Monroe County’s local income tax (LIT) rate.

On Wednesday, the vote on the motion to postpone was 8–1 with Steve Volan dissenting. The council will take up the matter again a week from Wednesday, at a special session on April 27.

Volan’s vote against postponement was not based on a desire to take a final vote on the LIT increase that night. Volan wanted some additional deliberation by the council on the question before postponement. The vote to postpone was taken at 10:52 p.m. almost four and a half hours after the meeting started, at 6:30 p.m.

Bloomington mayor John Hamilton has asked the council to consider an increase of 0.855 points, bringing Monroe County’s total rate to 2.2 percent.

If the city council approves the LIT rate increase by a vote of at least 8–1, that will increase the tax for all residents of Monroe County. If the approval gets fewer than eight votes of support, then the proposal would need to pick up some support from the county council and/or the Ellettsville town board.

Even though councilmembers did not take a vote on the LIT increase, they did approve the issuances of two $5.8 million general obligation bonds—one for a set of public works projects and the other for a set of parks projects. The board of park commissioners is set to take a final vote on the parks bonds on April 26. Continue reading “Local income tax increase postponed by Bloomington city council until April 27, but $11.6M in bonds OK’d”

Opinion: Local income tax increase, a way to heal rift between Bloomington, other stakeholders?

On Wednesday, Bloomington’s city council could take a final vote that would enact an increase to the local income tax (LIT) that is paid by all residents of Monroe County, whether they live inside the city limits or not.

two stacked bars side by side. Components of the layers are the different categories of LIT. The total height of the left bar is 1.345 which is the current rate. Adding in 0.855 of economic development category makes the right bar 2.2 high.
This article looks at the impact of enacting an additional 0.855 points in the certified shares (green) category of local income tax, instead of enacting the increase in the economic development category (lilac).

Bloomington mayor John Hamilton has proposed an increase of 0.855 points, which would make the total rate 2.2 percent. For county residents who pay the tax, it would mean an extra $85 dollars paid on every $10,000 of taxable income.

At the city council’s Wednesday night corral, there’s the possibility of some political horse trading, based on the amount of increase to the rate. The horse trading could even lead to a delay in the final vote for at least another week.

At-large council representative Matt Flaherty said at last week’s meeting he would support the rate as proposed by the mayor. But he added, “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.”

The balance to be struck in the package proposed by Hamilton is between public safety and essential services on the one hand, and climate change mitigation and quality of life on the other.

The focus of the council’s consideration now appears to be just the rate, and how much revenue it would mean for the city of Bloomington.

I think it’s wrong to make that the sole focus of deliberations.

It’s wrong for at least two connected reasons. Continue reading “Opinion: Local income tax increase, a way to heal rift between Bloomington, other stakeholders?”

Local income tax notebook: Impact on public library, public bus depending on distribution method

Community  discussion of Bloomington mayor John Hamilton’s proposed increase to the countywide local income tax (LIT) has not included much mention of category of LIT called the “certified shares” category.

two stacked bars side by side. Components of the layers are the different categories of LIT. The total height of the left bar is 1.345 which is the current rate. Adding in 0.855 of economic development category makes the right bar 2.2 high.
This article looks at the impact of enacting an additional 0.855 points in the certified shares (green) category of local income tax, instead of enacting the increase in the economic development category (lilac).

But the certified shares category makes up the biggest part of the current countywide local income tax rate.  It’s the green chunk of the bars in the chart that accompanies this article.

The certified shares category has a current rate of 0.9482 percent.

For Monroe County, the total current LIT rate is 1.345 percent, which comes from adding an additional 0.25 points in the public safety category, 0.0518 points in the property tax relief category, and another 0.0950 points in a special purpose category. The special purpose LIT revenues are used for juvenile services.

It’s the certified shares category of LIT that many other units of local government rely on for some of their basic operating expenses.

Among those units are all the townships, the Monroe County Public Library, Bloomington Transit, and the Monroe Fire Protection District. Continue reading “Local income tax notebook: Impact on public library, public bus depending on distribution method”

Wednesday’s city council committee meeting could mark the start of local income tax negotiations

Bloomington mayor John Hamilton’s proposal to increase the countywide local income tax (LIT) by 0.855 points, to a total of 2.2 percent, appears on the agenda for the city council’s Wednesday night committee-of-the-whole meeting.

Other revenue items on the agenda include two $5-million bond proposals—one for parks bonds and the other for public works bonds. [Updated at 4:34 on April 13, 2022: Two amendments to the list of projects to be funded by the bonds were posted by the city council office. Here’s a  link: 2022-04-13 meeting packet addendum.]

Also on Wednesday’s agenda is a nominal decrease to the drinking water rate, driven by the General Assembly’s repeal of the 1.4-percent utility receipts tax. It was ​​a pass-through tax, which means it was collected by utilities and forwarded to the state. For the residential rate, the decrease is 5 cents—from $4.03 to $3.98 per 1,000 gallons. That works out to 1.2 percent less.

No final votes will be taken on Wednesday night at the committee meeting. But it is the city council’s custom to take straw polls. That should give some indication of how councilmembers are leaning toward the proposed income tax increase. Abstentions are generally used as a mechanism to show moderate disapproval.

A final vote on a local income tax (LIT) increase by the city council could be taken as soon as next Wednesday (April 20). Continue reading “Wednesday’s city council committee meeting could mark the start of local income tax negotiations”

Bloomington mayor pitches 64% increase in Monroe County’s local income tax

In a news release issued Wednesday afternoon ahead of the city council’s evening meeting, Bloomington mayor John Hamilton put a specific number on the local income tax (LIT) rate increase he has been talking about for the last several weeks.

What Hamilton is proposing is an increase from 1.345 percent to 2.200 percent. That’s 0.855 points, or about a 64-percent increase to the current rate.

Based on the current public safety local income tax rate, which is 0.25 percent, and the state’s certified local income tax distributions for 2022, just a quarter-point LIT increase would generate a total of $9,025,682 a year countywide.

For a full point increase, that translates into $36.1 million in revenue countywide. That figure, multiplied by Hamilton’s proposed 0.855 increase, means about $30.87 million.

Based on the proportional population distribution method proposed by Hamilton, Bloomington’s share would be about $17.5 million. Monroe County government’s share would be about $11.9 million, with the remainder going to Ellettsville and Stinesville.

Continue reading “Bloomington mayor pitches 64% increase in Monroe County’s local income tax”

Analysis: Refresher for possible local income tax increase in Bloomington, rest of Monroe County

Bloomington mayor John Hamilton’s state of the city address last Thursday included a proposal to increase revenue, but was light on detail.

No amount was provided for a possible local income tax (LIT) increase.

But sometime in the next eight months or so, an increase to the current 1.345 percent tax on the incomes of Monroe County residents is likely to get a vote.

In the state of Indiana, local income taxes apply on a county-by-county basis. In counties like Monroe, where a city has a majority of the population, the political power to increase the tax rests mostly with the city.

In 2020, the Bloomington city council’s vote on a quarter-point LIT increase came in mid-September. The timing is affected in part by details of state law. The quarter-point increase was half what Hamilton had floated on New Year’s Day that year, but it failed 4–5 in front the city council.

Because the proposal didn’t have majority support even on the city council, there was no need for the Monroe County council or the Ellettsville town council to consider the proposed increase.

A lot has changed in two years.

One difference this time around is that Hamilton is not leading with a proposed amount for a LIT increase to fund climate action initiatives, with a promise later to identify specific spending proposals for the additional revenue.

This year’s approach could be analyzed as a response to a criticism heard two years ago: The mayor should have first identified the needed programs, next calculated the cost of the programs, then based a request for a LIT increase on the specific costs.

During Thursday’s speech, Hamilton put some effort into establishing the need for more revenue—to fund programs, from basic services, like public safety, to climate action.

What has not changed in two years are some of the basics related to how local income taxes can be increased.

Continue reading “Analysis: Refresher for possible local income tax increase in Bloomington, rest of Monroe County”

No increase to local income tax for Monroe County at this time: Bloomington’s city council votes 4–5

At Wednesday night’s meeting of the Bloomington city council, the voting tally on the proposal to enact a quarter point increase to Monroe County’s income tax was 4–5.

Voting yes were Dave Rollo, Matt Flaherty, Kate Rosenbarger and Steve Volan.

Voting no were Ron Smith, Isabel Piedmont-Smith, Susan Sandberg, Sue Sgambelluri, and Jim Sims.

Based on the wording of the state statute, the proposal looks like it is dead and does not need to be forwarded to the other members of the tax council—the Monroe County council, the Ellettsville town council and the Stinesville town council.

That’s because Bloomington’s city council action on Wednesday was a resolution to propose an ordinance to the rest of the tax council.

The statute says, “To [present an ordinance to other members of the tax council for passage], the member must adopt a resolution to propose the ordinance to the local income tax council and distribute a copy of the proposed ordinance to the county auditor.” [IC-6-3.6-3-8]

Given that the vote on the resolution was 4–5, the Bloomington city council did not adopt a resolution proposing an ordinance to the other members of the council.

A question asked by The Square Beacon at the meeting  during public commentary, to confirm that the other tax council members will not need to vote on the proposal, did not get a response.

Shortly after the meeting ended, a press release issued by the mayor’s office confirmed: “The ordinance will not be forwarded for consideration by the other members of the Monroe County Income Tax Council.”

The Square Beacon hopes to be able to report in more detail on the deliberations in a separate article. Continue reading “No increase to local income tax for Monroe County at this time: Bloomington’s city council votes 4–5”