Fiscal committee warns state tax changes could leave schools and library short unless county coordinates LIT approach

Councilmember Stosberg presented fiscal committee analyses of recent state legislation that changes the property‑tax and local income tax (LIT) framework and described AIM and Reedy Financial scenarios for Bloomington and nearby towns.

Stosberg said modeling shows that if Bloomington alone maximizes its municipal LIT (1.2%), the city could still face a projected shortfall (example: ~$13,000,000 in one scenario) while countywide approaches produce different distributions. She highlighted that school corporations and the public library face significant projected revenue declines in many scenarios: the transcript cites MCCSC with an estimated $17,000,000 shortfall and the library roughly $1,500,000 in a sample model presented to the council. Stosberg urged resident engagement with state representatives because the state law could be further amended.

Council discussed options including the state‑mandated MUST task force and the county’s role in choosing a coordinated rate. Stosberg emphasized the regressive risk: some low‑property‑value townships could pay more under certain redistribution formulas, while homeowners in higher‑income townships could see net annual savings under the modeled swaps between property and income tax. Council asked staff to keep exploring scenarios and to report back to the public and committees.