A change to simplify Indiana’s alphabet soup of county-level income taxes, is giving more authority to county councils on how to divvy up the money. And it could mean less money for other local governments to spend on projects.
New legislation reduces the CEDIT, CAGIT and COIT income taxes to a single local income tax, with the rate and the way the money is divided up being set by the County Council.
Of particular interest locally in Bartholomew County are the income taxes set aside for economic development. Communities from Columbus to Hope currently get a share of the economic development taxes that are used for various purposes. Columbus is paying $700,000 a year from Economic Development Income taxes for a bond issue, while Hope gives grants to local organizations and initiatives. At the county level, the county commissioners have had control of the EDIT funds and have used them largely for road projects.
That amount was largely determined by state formulas which allocated the amount each government body gets to spend. But going forward, the county council can decide how much to set aside for economic development funds, if anything.
But in Bartholomew County over the past few years, the County Council has been having to negotiate with the County Commissioners to give up some of that economic development money just to pay the general bills, meaning less miles of road repairs can come from that fund. Under the new rules, the Bartholomew County Council is already taking steps to reduce how much it gives the commissioners in the first place.
Council’s current budget will take $700,000 from the commissioner-control and use it for the general budget. Commissioners president Rick Flohr says, that while there are no hard feelings between the commissioners and the council, he is concerned about the the continuing siphoning-off of funds that were earmarked for county roads…
However, state officials say that by reducing the amount going to the county commissioners, the County Council would also be reducing the amount that go to the cities and towns, essentially shrinking the size of the pie that will be divided up between those bodies.
There are some hard limits too, according to state officials. If a taxing body is relying on the former economic development income taxes to pay a bond, the county council can not reduce the amount going to that city or town by an amount that makes it unable to pay the bills. In Bartholomew County, that would mean the Columbus bond payment of about $700,000 sets a lower limit on how little money the county can distribute and other organizations would be affected proportionately.
County Councilman Chris Ogle said during a budget meeting last week, that he would like to reduce the $2.8 million amount the city of Columbus has been receiving and use that money to shore up the county general fund. After the meeting though, he said he wants to understand the full impact that decision could mean.
Last week, the council agreed to hire an adviser to come up with a formula on how that money could be split between the various governments.
County Councilman Jorge Morales said he is frustrated by the lack of knowledge on how this is all supposed to work.
County Council is scheduled to hear a report tonight at 6 p.m. during its work session in the Governmental Office Building on Third Street.