Wording still in flux: Letter from Monroe County to Indiana legislators, prompted by jail funding worries

Based on a 20-minute discussion at the end of their regular Thursday meeting, Monroe County commissioners are still hoping to win support from county councilors for a letter they want to send to state legislators, asking for revisions to state law to help finance the planned new Monroe County jail.

County electeds are considering sending a letter to the Indiana General Assembly because SEA 1, which was enacted in this spring’s legislative session, has an impact on the county government’s plan for financing the jail and justice center project. The county’s current plan is to build a co-located justice facility and jail North Park with around 500 jail beds.

At the county council’s meeting on Tuesday, one possibility seemed to be that the commissioners would go ahead and send the version of the letter they wanted, possibly with support from the sheriff and board of judges, but without the signatures of county councilors.

But it looks like the current approach will be to continue discussion about the letter with the county council at its next regular meeting, which is set for July 22. A revised version of the letter was displayed on the in-room monitor at Thursday morning’s meeting.

One big sticking point for the version discussed earlier in the week was the inclusion, as an option, of a special purpose tax. The idea was that the legislature would allow Monroe County to use the special purpose tax to construct, operate, and maintain a justice center complex and let the special purpose tax get a property tax back-up for 25 years.

The option of a special purpose tax was the focus of sharp criticism from councilor Marty Hawk on Tuesday. She also weighed in from a remote connection for Thursday’s meeting of the county commissioners to voice her objection to that mechanism as a request to be made of the state legislators.

The idea of the special purpose tax is no longer included in the current draft of the letter.

In the draft considered Thursday morning, the specific request of the legislature was spelled out like this:

Thus, the Monroe County Government respectfully asks legislators to consider enacting legislation to a) allow counties to pledge LIT in an amount exceeding 25% of income tax revenues; b) allow county councils to approve a LIT rate as early as January 1, 2026; c) permit automatic renewal of the LIT rate necessary to cover debt service (removing the annual renewal requirement); and d) allow this pledge to receive a property tax back-up for a 25-year period.

That part of the letter addresses two features of SEA 1 that add to Monroe County’s jail financing challenge. One is a limit on the amount of total LIT revenues that can be pledged towards debt service, which is 25%. Monroe County’s current financing plan calls for about 50% of its LIT revenues for the new jail. Another feature of SEA 1 is the requirement that a county council has to renew the tax annually, which will have an impact on the interest rate for the bonds, given that the continuation of the tax would hang in the political balance every year.

The most recent price tag that has been presented to county officials, by DLZ Corporation in February, calls for $207 million in construction costs and another $30 million in soft costs.

In October 2024, the county council enacted a local income tax (LIT) for the new jail at a rate of 0.17%. The county’s jail financing plan also includes using proceeds from the county government’s share of the 0.69% economic development LIT that was imposed countywide by Bloomington’s city council in May 2022.

Even if the county government taps revenues from both kinds of local income tax revenues, it would have a bonding capacity that would still leave it a little short of the total $237 million price tag for the new jail.

On Thursday, commissioners were keen to stress that even though the legislature is not currently in session, it’s important that the letter get sent now, or no later than early August, so that Monroe County’s interests can factor into the General Assembly’s work flow when it matters.

Commissioner Jody Madeira put it like this: “People think [bills] spring forth, like Venus on the half shell, in January, and … they seem to pop up there in all their glory. But that’s not really how they happen.” Madeira said legislators are currently working on bills, and for Monroe County to wait until October and November would be “really late in the process,” Madeira said.

Commissioner Julie Thomas pointed to the advice that commissioners had received from their lobbyist, Tamm Capital Group, the previous day. Tamm’s advice was to send the letter by the beginning of August. The other piece of advice from Tamm that was cited by Thomas at Thursday’s meeting was to reduce the letter to a single page of text.

Besides the question of the letter to state legislators, the jail project itself could soon be getting some renewed focus by county commissioners and county councilors. A timeline presented by DLZ Corporation in February called for Schematic design and cost estimates to be presented to county officials by DLZ/WGS on May 29. (WGS is construction manager for the project. The letters in the acronym come from three different construction companies who are working as a kind of joint venture–Weddle Bros. Building Group, Garmong Construction, and Smoot Construction.) 

That presentation will now take place at the earliest in mid-August, according to commissioners administrator Angie Purdie. Based on that timeline, the bonding process for the jail project was supposed to start in August.