Consultant briefs Jay County leaders on local income tax, EDIT and TIF options

Jason Semler, partner at Baker Tilly Financial LLP, briefed Jay County commissioners, council members and the county redevelopment commission at a joint meeting April 5 in the courthouse auditorium on the mechanics and local policy choices tied to Local Income Tax, EDIT and Tax Increment Financing.

Semler told officials that LIT is one of the few discretionary revenue streams the county controls outside property taxes and that it grows with county residents and payrolls, whereas property tax receipts are constrained by a statutory maximum levy. He outlined the county’s current LIT structure and rates, saying the expenditure bucket can total up to 2.5% (Jay County was at 2.45%), PTRC (Property Tax Replacement Credit) is 0.6%, the Certified Shares/Levy Freeze (formerly CAGIT) portion is 1.4% and EDIT (LIT–Economic Development) is 0.25%; LIT–Public Safety (formerly LOIT) was described at 0.2% for public-safety answering points.

Semler provided the county’s EDIT receipts for 2023 as $1,053,278 and gave an allocation breakdown: $636,967 to Jay County; $297,038 to Portland; $89,028 to Dunkirk; $2,026 to Bryant; $6,514 to Pennville; $21,197 to Redkey; and $508 to Salamonia. He explained all LIT receipts are distributed monthly to the auditor, who allocates funds according to state authorization and local pledges, and warned that once a tax is pledged to a bond it cannot be reduced without satisfying the pledge.

On Tax Increment Financing, Semler described the expanded use of TIFs for residential development (HO-TIFs) and the flexibility redevelopment commissions can offer, including buying land, entering lease agreements, issuing bonds and funding façade or infrastructure programs to attract development. He explained the plan-amendment process: the redevelopment commission adopts a declaratory resolution, the plan commission reviews the change for consistency, then approvals and a required public hearing follow at the redevelopment commission and local legislative bodies.

County attorney Wes Schemenaur and Semler gave examples of allowable redevelopment tools — loans that convert to grants, developer reimbursements tied to benchmarks, and purchases to assemble or market sites — while stressing those actions still require council or commission approvals when the law or local policies so require.

Council and commissioner members asked procedural questions about who controls EDIT budgeting and transfers. Auditor Emily Franks showed a recent intra-fund transfer; Semler said transfers within the same account “series” (the third set of account numbers) are generally handled differently than transfers between series and that counties vary in practice. When Council member Matt Minnich asked whether EDIT was being used as a "slush fund," Jeanne Houchins said the council is required to appropriate money and objected to the phrase, while Harold Towell said he had been told commissioners could spend appropriated funds; Semler declined to adjudicate the claim without transaction-level details.

Resident and meeting participants raised practical questions about housing, whether Premier Ethanol TIF monies could be used toward new housing, and where Jay County ranks among counties on LIT rates; Semler estimated Jay County fell near the middle of 92 counties but said he would double-check exact rankings. Jeff Bailey asked whether the Department of Revenue can report LIT attributable to individual manufacturing facilities; Semler said the DOR does not provide a facility-level report.

The joint session closed at 7:20 p.m.