Upcoming local income tax negotiations could run deep, wide for Bloomington city council

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. Continue reading “Upcoming local income tax negotiations could run deep, wide for Bloomington city council”