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Marshall County council hears plan to reorganize local income tax distribution
Summary
County financial adviser Steve Dalton told the Marshall County Council a proposed local income tax restructuring would keep the overall rate the same but reallocate special-purpose dollars into discrete buckets for jail operations and 9‑1‑1/court spending; council members discussed timing, auditing and next steps.
Marshall County County Council members heard a detailed presentation July 20 on a proposed restructuring of the county’s local income tax distribution that would change how certain special-purpose dollars are allocated but would not raise the overall tax rate.
Steve Dalton, financial adviser for the county, told the council the county currently collects roughly $20 million in local income tax, with about $16 million as certified shares distributed to local taxing units and roughly $4 million held for special purposes. “The good news is no change in overall tax rate,” Dalton said, while laying out a plan to split special-purpose revenue into clearer silos for jail operations and 9‑1‑1/court-related expenses.
Dalton said the shift is largely an accounting and distribution redesign rather than a rate increase: the combined LIT rate would remain at the same aggregate level the council now levies, while specific basis-point allocations would be reassigned so that jail costs and PSAP/court costs are separately funded. He described the concept as adopting two small subrates (for example, a pair of 0.02/0.03 allocations) and said staff and the auditor will refine which expenses are chargeable to the court LIT versus the 9‑1‑1/PSAP piece so the county remains within state board-of-accounts rules.
Council Chair emphasized the need for precise figures and timelines. The chair explained the mechanics of basis points and revenue yield, noting that “one basis point is about $160,000” locally and that five basis points (0.05) would produce roughly $800,000 in revenue for the designated purpose. Council members asked whether the proposed distribution would cover existing jail and 9‑1‑1 needs and whether restrictions on using court LIT (for example, limits on funding certain positions) will require splitting that portion further.
Dalton recommended attorney and auditor review of draft ordinance language; he proposed the county’s August meeting be the first reading of an ordinance and the September meeting be the adoption vote, with an effective implementation date of Jan. 1. He and the chair cautioned that state-level changes to the LIT framework could alter the plan’s duration and that the county may need to revisit allocations if the General Assembly makes changes.
What happens next: staff and the county attorney will work with the auditor to finalize the ordinance language and submit draft documents to the Department of Local Government Finance or the appropriate reviewer for preview. Council members said they expect the matter to return for a formal first reading at the August meeting and a possible adoption vote in September. No formal vote on a tax ordinance was taken at the July 20 meeting.
