From the Elkhart Truth:
The city will receive $1.2 million because of an accounting error at the state level involving local taxes.
The relief comes just in time for Mayor Dick Moore. He learned two weeks ago that 2012 property tax distributions have left a $2.1 million shortfall in the city’s budget. The news left the city scrambling for a solution, he said. Moore said the unanticipated funds will help, but it won’t cover the city’s total loss.
“We’ve been working with our department heads to figure out how to do this without diminishing our services, without closing anything down and without losing any of our employees,” Moore said.
Officials said the state had overpaid Elkhart County for income taxes and initially ordered a reduction in income tax distribution. But a miscalculation discovered earlier this month has led the state to divide $205 million among counties, municipalities, school districts and other taxing units that depend on income tax for financial support. That money includes undistributed funds collected from county adjusted gross income taxes, or CAGIT, and the economic development income taxes, or EDIT, from 2011 and the first four months of 2012.
Elkhart County received $5.16 million as a result of the state’s error. The city of Elkhart will be able to deposit slightly more than $911,000 in CAGIT funds into its general fund to use for daily operations like public safety, the parks system, and paving and plowing streets. The state will give the city almost $300,000 in EDIT funds.
“EDIT funding is used by the city of Elkhart for economic development, and about everything we do is economic development, but it’s also been used to somewhat support our day-to-day operations,” Moore said.
The city is expecting to receive $1.1 million in CAGIT funds for the entire year, and $447,000 in EDIT money, according to calculations from the Department of Local Government Finance. Moore said about $242,000 in property tax replacement credits are due as well.
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http://www.etruth.com/article/20120416/NEWS01/704169971
