Board rejects tax commission recommendation to propose 0.4% earned-income-tax increase

The board voted down a proposal to accept the tax commission's recommendation to place an earned-income-tax referendum before voters. The motion failed on a voice roll call, 3 in favor and 5 opposed.

Supporters of sending the recommendation to voters argued the commission's estimate — that a 0.4 percentage-point increase in the earned-income tax could generate roughly $3,000,000 in gross revenue under current figures — created an opportunity for the district. As presented in the meeting, the district would be required under homestead and farmstead rules to refund roughly $2,000,000 of that amount, leaving a net projected increase of approximately $1,000,000 to the district based on the commission's calculations and current budget figures.

Opponents argued the measure would disproportionately affect working households and small businesses and could discourage economic activity and investment. One director, citing academic literature and local economic concerns, said higher local income taxation can erode a small community's tax base and hurt job creation; another director said the board should be cautious about initiating a tax-raising referendum at a time when the district's business environment is fragile.

Several directors noted the commission performed a multi-month review and produced a detailed report, and some said that because the commission completed its work the recommendation should at least be forwarded to voters. Others said that the board's role was not to impose higher local taxes on working households, and the vote concluded the board will not pursue the commission's recommended referendum at this time.

The vote tally recorded on the roll call was 3 yes and 5 no; the motion therefore failed. No further action on that recommendation was taken at the meeting.