From the Richmond Palladium-Item:
The need for more revenue to pay for ambulance service might cause Union County officials to adopt two local income taxes to replace revenue lost to the property tax caps.
On Monday, the Union County Board of Commissioners imposed a spending freeze for the remainder of the year, saying the only additional spending commissioners will consider will be emergency issues. The county already took a $100,000 loan from other funds to keep the General Fund in the black until property tax payments were distributed last month.
The commissioners and the Union County Council heard a presentation Monday from Jason Semler of Umbaugh and Associates on the benefits of adopting new local income taxes. Those funds would help the county pay the $75,000 increase requested by Rural/Metro for ambulance service in 2015.
More Indiana counties are adopting local income taxes as property tax revenues decline because of property tax caps, Semler said.
By law, property taxes for homesteads are capped at 1 percent of the property’s assessed value, rentals and farmland are capped at 2 percent, and business and other properties are capped at 3 percent.
Union County taxing units lost almost $430,900 this year because of the tax caps. The county lost $67,406 of that total, and the school system lost $137,369, according to the Department of Local Government Finance.
Liberty lost $187,000 in income this year to the property caps, Clerk-Treasurer Cheryl Begley said.
To raise more money, the county council could chose one of two local option income taxes designed to serve as property tax relief and also add a public safety local option income tax, with a combined rate of 1.25 percent, Semler said.
Umbaugh offered to prepare a financial study of the various options for a fee not to exceed $5,500. The commissioners said they’ll decide on the study at their July 21 meeting, after the Union County Council meets at 9 a.m. Thursday. The study would show how much revenue would be generated by the different local option taxes and rates.
The council has until Oct. 31 to adopt the new taxes, for collection to begin Jan. 1. If the taxes were adopted by Aug. 31, collection could start as soon as Oct. 1.
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http://www.pal-item.com/apps/pbcs.dll/article?AID=2014307070011
