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”→
From left: Andrew Krebbs, John Hamilton, Beverly Calender-Anderson, Mike Diekhoff (April 20, 2022).
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.
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.
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.
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.
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).
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.
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.
The image, looking east, is dated April 2020. It’s from the Pictometry module of Monroe County’s online property lookup system. Annotation by The B Square.
Getting unanimous approval from Bloomington’s plan commission on Monday night was the site plan for a three-story, 21,000-square-foot office building in the Trades District.
The joint project of the city’s economic and sustainable development (ESD) department and the Bloomington Economic Development Corporation is the planned home of a technology center that won a $3.5 million grant from the federal Economic Development Administration.
The total cost of the project is around $5.5 million. Bloomington’s redevelopment commission is using tax increment finance (TIF) revenue to make the required local match of the federal dollars.
A six-vote majority on Bloomington’s nine-member city council was enough Wednesday night to grant pharmaceutical company Catalent a tax abatement in exchange for a capital investment of $350 million and 1,000 new jobs.
The additional jobs would grow the pharmaceutical company’s local workforce by about one-third.
[Updated April 21, 2022: In a news release Catalent has announced it has chosen Bloomington as the location where it will be making a $350 million investment.]
Catalent is looking to spend about $10 million on development of real property, possibly by buying more land. The other $340 million would be invested in personal property, which includes all the non-permanent fixtures inside a building, like manufacturing equipment.
The investment by the pharmaceutical company would be contingent on a tax abatement on the additional value for both real and personal property. Real property would be abated at a rate of 50 percent a year for 10 years, making a total of $826,760 in additional paid property taxes and $826,760 in abatement.
The bigger break comes for the personal property, which is 90 percent for 20 years, and totals an estimated $43,450,785 in abated taxes, which is calculated to have a net present value of about $28.4 million.
Speaking in support of the tax abatement was Bloomington’s director of economic and sustainable development, Alex Crowley, who allowed that the cumulative figure for the abatement is an “eye-popping number.”
Public comment in favor of the abatement came from current and former elected officials, including former mayor John Fernandez (1995–2003) who also served as assistant secretary of Commerce for Economic Development Administration in the Obama administration.
Fernandez said, “This decision isn’t so much about Catalent—it’s about creating economic opportunities for our community, for people in our community who are at risk of being left behind in an ever changing dynamic economy.”
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.
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.
By the end of 2026, Catalent might spend $350 million, in order to expand its Bloomington operation at South Patterson Drive in the southwestern part of town.
The project would add 1,000 new jobs, growing its local workforce by about one-third.
The pharmaceutical company is looking to spend about $10 million on development of real property, possibly by buying more land. The other $340 would be invested in personal property, which includes all the non-permanent fixtures inside a building, like manufacturing equipment.
The investment by the pharmaceutical company would be contingent on a tax abatement on the additional value for both real and personal property. Real property would be abated at a rate of 50 percent a year for 10 years, making a total of $826,760 in additional paid property taxes and $826,760 in abatement.
The bigger break comes for the personal property, which is 90 percent for 20 years, and totals an estimated $43,450,785 in abated taxes, with $4,827,865 in additional taxes to be paid.
It’s not a done deal, even if Bloomington’s city council grants the abatement, in a series of steps that will start at its meeting next Wednesday, Feb. 16.
That’s because Bloomington is just one of a number of other places in the country that are in the running for Catalent’s potential expansion in production capacity.
At the city council’s Feb. 4 work session, Bloomington director of economic development Alex Crowley put it like this: “[Catalent has] not made a decision—we are competing for this investment with other areas in the nation. They have biologics plants—as you’ll hear as part of their presentation, around different parts of the country.”
A citywide high-speed fiber-to-the-home network could finally be coming to residents of Bloomington. That includes territories outside the municipal boundaries that are in the process of being annexed by the city.
The image links to the letter of intent signed between Bloomington and Meridiam.
In a news release issued late Tuesday morning, Bloomington announced that the city and Meridiam, an infrastructure development company, have signed a letter of intent for the firm to build and operate an open-access fiber network that would bring high-speed internet access to Bloomington.
Meridiam is based in Paris with offices worldwide, including one in New York.
Tuesday’s announcement comes four and a half years after Bloomington announced the end of its attempt to partner with Axia, a Canadian company, in an earlier effort to create a citywide fiber network.
