Johnson County Council assesses income tax changes affecting local schools and library funding

Johnson County officials are grappling with significant changes to local tax structures that could impact funding for schools and public services. During a Special Council and Commissioners Joint Meeting on June 25, 2025, discussions centered on the implications of the county's Local Income Tax (LIT) rates and the potential loss of revenue for schools.

The county currently operates under a 1% LIT rate, which is shared among various local units, excluding schools. However, recent changes mean that schools in Johnson County will face a revenue shortfall as they will no longer receive funds from property tax replacements that previously supported their budgets. This shift is particularly concerning for schools that relied on these funds, as they now must adjust to a new financial reality.

County officials highlighted that the county has the authority to increase the LIT rate up to 1.2%. To maintain current funding levels, a rate of approximately 0.5% would need to be adopted. This increase would help offset the anticipated loss of about $2 million annually due to new property tax credits affecting the county's bottom line.

Additionally, the council must consider how to allocate the new LIT capacity, which includes funding for libraries and townships. The maximum allowable increase for libraries is capped at 0.05%, which will be distributed based on population.

As the council deliberates these changes, the decisions made will have lasting implications for local schools and public services. The urgency of these discussions underscores the need for a strategic approach to ensure that essential services remain funded and that the community's educational needs are met. The council's next steps will be crucial in shaping the financial landscape of Johnson County in the coming years.