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”

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”