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 at the city council table for the

view looking down the city council dais from the right, one councilmember is leaning in looking towards the camera

Councilmember Jim Sims looks down the dais towards the mayor’s end of the table. (March 25, 2022 work session.)

Horizontal bar chart with 92 bars one for each county showing total LIT rate. Monroe County's tax rate is highlighted in red. At 1.345 in the bottom quartile of the state. There's a vertical line drawn at 2.2 points which intersects with the other bars at about the first quartile mark.

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

man standing at a podium and mic talking, gesturing with right hand

Bloomington mayor John Hamilton on April 6, 2022.

Table each for four government units on a row. The key column is the share of about $30 million of extra revenue for each unit. Here's the breakdown: Bloomington $17,490,424; Ellettsville $1,470,276; Stinesville $48,604; Monroe County $11,858,308

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” →