Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Local Income Tax topic
No spam. Unsubscribe anytime.
Baker Tilly presents baseline model for Whitley County local income tax; libraries and townships could lose funding
Summary
At the task force's first official meeting, a Baker Tilly consultant showed baseline modeling of Indiana's new local income tax structure that would likely boost county and Columbia City receipts while leaving several townships and two libraries with steep projected losses; the consultant will run follow-up scenarios and provide township consolidation lists before the next meeting on July 22.
A consultant from Baker Tilly presented baseline financial modeling at the first official Whitley County Local Income Tax task force meeting, showing how the state's new tax structure could shift millions of dollars among county, municipal and nonmunicipal units.
The consultant said Whitley County's current total local income tax rate is 1.6829% and that the state's new structure caps any single taxpayer at 2.9%. She reported the county's adjusted gross income as $1,300,000,000 and said that adopting the maximum 1.2% county unit rate in the consultant's baseline would produce an estimated county share of about $12.2 million (a countywide expenditure pool the consultant cited at roughly $15.3 million), representing roughly $3.1 million in additional revenue for the county under that scenario.
Why it matters: the consultant said the new allocation formulas (population-based allocations for many units and statutory caps for nonmunicipal units) will create winners and losers across municipalities, townships and libraries and therefore require careful scenario work and interlocal planning before the county files a recommendation with the Department of Local Government Finance (DLGF).
Key details from the presentation included two municipal options for Columbia City: if Columbia City "opts in" to the countywide municipal rate, the consultant estimated Columbia City receipts could rise to about $6.6 million from the current roughly $4.2 million; if Columbia City adopts its own municipal rate (opts out), the consultant estimated Columbia City's receipts could fall to about $3.6 million, shifting allocation patterns for other towns and the county.
The consultant flagged sharp projected declines for several townships under the population-based nonmunicipal allocation (the consultant used the statutory maximum of 0.05% per nonmunicipal unit type in an illustrative run). Examples cited: Cleveland Township's current certified-share receipts of about $214,000 would fall to roughly $62,000 in the baseline model, and Thorn Creek Township's receipts were shown dropping from about $202,000 to $78,000. The consultant noted those townships commonly use certified-share revenue to fund fire protection and said the net effect depends on how fire and EMS distributions are handled.
Library funding emerged as a central concern. The consultant said one library could more than double receipts at the maximum illustrative allocation while Peabody Library and South Whitley Community Library face projected losses of roughly $211,000 and $253,000 respectively. "This isn't gonna work in our county for the libraries," the consultant said, urging the task force to consider asking the legislature for flexibility.
Fire and EMS allocation will be particularly sensitive, the consultant warned. Under statute the county council must allocate fire and EMS using both service-area population and service-area square mileage; the consultant ran an initial 50/50 weighting and also illustrated an "off-the-top" approach that assigned 7.5% to EMS because the county EMS budget represented 7.5% of combined budgets in the sample data.
Several participants raised policy and political concerns. Hodges, identified as a member of the Whitley County Council, said he was opposed to any new or increased tax: "I am absolutely not for a new or increased tax," he said. Other municipal representatives asked whether the county could adopt different internal rates or use interlocal agreements to make up shortfalls for libraries and townships; the consultant said interlocal agreements and creative policy language could be included in the task force report for the legislature to consider.
The consultant also walked through illustrative taxpayer impacts: a household with $40,000 adjusted gross income currently would owe about $673 annually in local income tax (about $56 a month); at the maximum illustrative rates that liability could rise to about $1,160 (about a $500 annual increase), while a revenue-neutral scenario would produce a smaller increase (the consultant's example showed about $99 annually for the low-income example and roughly $188 for the county average AGI of $76,000).
Next steps: Baker Tilly will provide a list of townships likely subject to DLGF consolidation, add a model option to estimate revenue directed to school corporations, and supply budget details for townships, libraries and fire and EMS providers so the task force can run multiple allocation scenarios. The consultant said the county must submit a report to the DLGF before Dec. 1 and encouraged members to include creative or aspirational policy proposals for the legislature to consider. The task force scheduled its next meeting for July 22 at 6 p.m.
No formal votes occurred at the meeting. Baker Tilly said it will bill the county monthly for time and expenses and asked the entities represented to decide how consultant fees should be apportioned for work on the task force report.
The task force will reconvene to review detailed scenarios, township consolidation lists and possible interlocal approaches to mitigate funding losses for sensitive services such as libraries and fire protection.
