Tag: local income tax

Proposed local income tax increase for Monroe County residents, tax bump for Bloomington property owners: Some details emerge

In a memo released Thursday afternoon, Bloomington mayor John Hamilton announced some details about an anticipated local income tax (LIT) increase for Monroe County.

Bloomington’s city council will be asked to enact a tax increase as soon as one month from now.

Also getting some additional detail was the issuance of $10 million in general obligation (GO) bonds that the council will be asked to approve. Issuing GO bonds will bump Bloomington’s property tax rate.

Several documents released on Thursday, and posted on a separate page on the city’s website, include a breakdown for potentially $17 million in additional annual spending by the city of Bloomington, based on additional local income tax revenues.

The broad categories of possible increased LIT spending are: climate change ($6.35 million); essential services ($2.5 million); public safety ($4.5 million); and quality of life ($3.65 million).

Under the climate change category, the biggest part ($4.85 million) could go towards public transit.

[Google Sheet compiled by The B Square]

Continue reading “Proposed local income tax increase for Monroe County residents, tax bump for Bloomington property owners: Some details emerge” →

Local income tax notebook: How Monroe County stacks up statewide

Monroe County boundary highlighted.
Vertical blue line = 1.845 percent, which is the LIT rate Monroe County residents would pay if the current rate were increased by a half point.

During a Feb. 24 speech, Bloomington mayor John Hamilton made explicit what had been implicit since last fall’s budget deliberations: Some kind of request for a local income tax increase would be put in front of the city council this year.

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

The plan to generate more revenue is not limited to increasing the local income tax.

Part of Hamilton’s pitch to the city council to approve the 2022 budget included a planned issuance of $10 million in bonds to support climate initiatives. Issuing those bonds will translate into a property tax increase.

Hamilton’s February speech tried to make a preliminary case for the idea that Bloomington and Monroe County’s comparatively low existing tax rates—both income and property tax—give the city room to raise the rates for both kinds of taxes.

In more detail, here’s what those numbers look like. Continue reading “Local income tax notebook: How Monroe County stacks up statewide” →

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” →

Bloomington mayor: “We need to talk about resources for our community—new revenue.”

Bloomington mayor John Hamilton.
Bloomington deputy mayor Don Griffin emceed Thursday’s event.
The venue for the Feb. 24, 2022 “state of the city” address was the Buskirk-Chumley Theater

During a speech on Thursday night, billed as a “state of the city” address, Bloomington mayor John Hamilton put the first half hour into a celebration of the city’s accomplishments dating to 2017 and earlier.

That was the windup to three more pragmatic points.

Hamilton said that for “Democrats who want to get things done,” there are three points of alignment: climate action; diversity and equity; and new revenue.

On those three elements, Hamilton said, “We need to align, to go forward together.” That was the title of his speech: “Forward Together.”

He quickly added, “Now, tonight is not for all the details.”

In his Thursday speech, Hamilton did not float a specific proposal for a local income tax. After the speech, Hamilton was firm if friendly, when pressed by The B Square, about not naming an amount, or a range, for a possible tax increase. Continue reading “Bloomington mayor: “We need to talk about resources for our community—new revenue.”” →

Catalent tax abatement OK’d in first of two Bloomington city council votes: 9–0

Bloomington’s city council voted 9–0 on Wednesday night to approve a tax abatement for Catalent in exchange for a capital investment of $350 million and 1,000 new jobs.

Final approval will require a confirmatory vote on March 2, after a public hearing.

The additional jobs would grow the pharmaceutical company’s local workforce by about one-third.

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.

Because tax increment finance (TIF) capture is calculated on real property but not personal property, the impact of the abatement on TIF revenue would not be significant.

In the state of Indiana, the tax abatements don’t have an impact on the tax levy, that is, the amount of taxes collected by local governments. But an abatement does have an impact on how the tax burden is distributed across different taxpayers.

Councilmember Ron Smith was sanguine about the tax abatement. “I just think this is a fantastic opportunity,” Smith said.

Some councilmembers said they were voting yes Wednesday night, but seemed to leave open the possibility of voting no two weeks from now. Their concerns included: some skepticism about the “but for” criterion for tax abatements; the ability of Bloomington’s market to absorb the demand for additional housing; and the diminished income tax benefit of the new jobs due to out-of-county location of workers. Continue reading “Catalent tax abatement OK’d in first of two Bloomington city council votes: 9–0” →

Bloomington to woo Catalent with tax break as pharma company might invest $350M, add 1K jobs

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.”

Crowley added, “Bloomington, I think, stacks up pretty well, from a talent perspective, from a quality of life perspective, the site, and the adjacent land availability.” Continue reading “Bloomington to woo Catalent with tax break as pharma company might invest $350M, add 1K jobs” →

A look ahead to 2022: Bloomington area local government stories

North Walnut Street Lamp on Christmas Eve

Last year’s lead art for The B Square’s look ahead to 2021 featured this caption: “These numerals began life as a photograph of the sidewalk around the courthouse square in downtown Bloomington, where the crows like to crap. It was that kind of year.”

Arguably a worse year was 2021. So this year’s art includes an actual crow and a built-in sense of foreboding. Is that kid going to land his jump over the crow to get to next year?

Here’s an incomplete roundup of stories to watch in 2022 Continue reading “A look ahead to 2022: Bloomington area local government stories” →

Bloomington 2022 budget revenues: Property tax levy up, local income tax down

Bar Chart for PROPERTY TAX Aug 23 2021 article
Better2 Bar Chart for Bloomington Certified Shares Income Tax Aug 23 2021 article

Last Friday, Bloomington mayor John Hamilton released his proposed 2022 budget.

Compared to the 2021 budget, the combination of local income tax distributions and the general fund property tax levy nets out to about zero change for 2022 revenues.

There’s an increase in the general fund property tax levy (based on a 4.3-percent growth quotient)—from $24.43 million to $25.48 million, or an increase of $1.05 million.

But Bloomington’s certified share of local income taxes is expected to drop 7.8 percent, from $13.65 million in 2021 to $12.56 million in 2022, for a difference of $1.09 million.

So the $1.05 million gain in property tax levy is erased by the $1.09 million loss in local income tax revenues.

Still, the overall proposed budget for the city of Bloomington in 2022—not including Bloomington Transit, Bloomington Utilities, and the Bloomington Housing Authority—will increase by ​​about $11.5 million compared to 2021, making the total for 2022 about $106.6 million.

The revenue to cover the $11.5-million increase is coming from the two federal pandemic relief packages—the Coronavirus Aid, Relief, and Economic Security (CARES) Act and American Rescue Plan Act (ARPA).

According to Bloomington’s 2022 proposed budget document, the $106.6 million budget will tap  Bloomington’s CARES Act funding for $1 million and the ARPA for $9.735 million.

Unlike the 2021 budget, which relied on a $2-million transfer from the rainy day fund, the 2022 budget does  not make any transfers out of the rainy day fund.

Continue reading “Bloomington 2022 budget revenues: Property tax levy up, local income tax down” →

Area state legislators update local residents on state budget, local income taxes, closure of capitol

At a forum hosted Saturday morning by the League of Women Voters Bloomington-Monroe and the Greater Bloomington Chamber of Commerce, three state legislators gave an update after two weeks of this year’s session.

Screen shot of the Jan. 16, 2021 forum co-sponsored by the League of Women Voters and the Greater Bloomington Chamber of Commerce. Clockwise from upper right: Ann Birch (president of the LWV of Bloomington-Monroe, Matt Pierce (representing District 61 in the state house), Peggy Mayfield (representing District 60 in the state house), and Shelli Yoder (representing District 40 in the state senate.) (Image links to CATS recording of the forum)

Any partisan jostling that unfolded between the two Democrats and one Republican who attended was relatively mild.

In their opening remarks, and in their responses to the questions from the public, they covered a range of topics, including the budget, teacher pay, local income tax, and next week’s capitol closure, among others.

Matt Pierce, a Democrat representing District 61 in the state House, used his opening remarks to talk about the budget. Indiana’s legislature adopts a budget every two years, and that cycle makes 2021 a budget year.

Pierce said, “It’s interesting that the governor and his proposal seems to be focusing mostly on buildings and infrastructure.” Pierce said the Democrats would be taking a different approach from that of Republican governor Eric Holcomb.

Pierce said, “We think that particularly at a time when so many people are struggling, we should be maybe focusing the resources we have more on people—people infrastructure, human capital, and particularly those who are struggling at the bottom.”

Pierce added, “It seems like we do a very good job of stockpiling the surplus, but even when it’s raining, and you might want to use a rainy day fund, seems like we still kind of hang on to that money.”

Following Pierce was Peggy Mayfield, a Republican representing District 60 in the state house. Mayfield took up the topic of the surplus by saying, “Because Indiana has been so disciplined over the last decade…, we have money now to continue to invest in Indiana, instead of figuring out how we’re going to pay our bills coming out of this pandemic.” Continue reading “Area state legislators update local residents on state budget, local income taxes, closure of capitol” →

Bloomington finalizing digital equity plan, with recommendation for new staff position

At a sparsely attended public meeting last Tuesday, Bloomington’s IT director, Rick Dietz and consultants from Maryland-based CTC Technology and Energy made themselves available for feedback on the city’s draft digital equity strategic plan.

The introduction to the plan describes “digital equity” as a situation where “all individuals can fully participate in work, school, society, and economic opportunity by having sufficient access and ability to use broadband and computing devices.”

The question of digital equity has become more pressing during the COVID-19 pandemic, as full participation in work and school have presupposed adequate hardware and connectivity to the internet.

The draft plan incorporates pandemic perspectives from representatives of Monroe County Community School Corporation and Monroe County Public Library.

According to the draft plan, “The emergency response programs that MCCSC took on, such as the hotspot program, created significant administrative burdens and affected MCCSC staff’s ability to do their core jobs.” The draft plan continues, “MCCSC’s tech support staff became responsible for direct communication with approximately 11,000 students and 17,000 parents.”

According to the draft plan, the public library “reported a surge in e-library usage and a vast unmet need for laptops and hotspot devices, requiring more funding.”

The draft includes several recommendations, among them the suggestion that a new city staff position be hired to focus on digital equity issues. Continue reading “Bloomington finalizing digital equity plan, with recommendation for new staff position” →