By Jessica Kerman
ANDERSON — Patti Perkins, Pendleton resident, does not want her taxes raised.
“I think another tax right now is just going to hurt people who are already hurting,” she said.
A month after the Madison County Council approved measures for a wheel tax, technically known as a local option highway user tax, to start next year, the Anderson City Council will consider an increase for another tax — the county option income tax (COIT).
The proposed countywide .25 percent increase would bring the county’s total income tax rate to 1.5 percent.
The income tax can go up to 1 percent higher than what it is now, according to state law, which was changed when the property tax relief plan was passed by the Indiana General Assembly in March.
According to Jim Steele, former city controller and financial consultant for the city and county, both Anderson and Madison County will need funding in 2010 to continue services.
“Based on preliminary numbers, the county will need some funding in 2010,” he said. “It looks like they can limp through 2009, but when you take into account the circuit breakers starting in 2009, the impact in 2010 is more than twice the impact in 2009, and that’s when they get into trouble.”
Anderson is expected to lose $2.81 million in 2009 and $4.6 million in 2010 because of the property tax caps.
Karen Carpenter, controller for Anderson, said the city needs more funding or it will have to cut services or employees.
“The 2009 budget, the police department has 120 police officers budgeted, the fire department has 125, and if we don’t have some kind of increase, either in the COIT or looking at other options we may have, then you’re going to have to look at a reduction in number of employees, whether in police, fire or city employees,” Carpenter said.
The city has also discussed attaching user fees to services, such as trash pickup, which cost the city $2.8 million this year.
“We’ve never charged (households),” Carpenter said. “There never has been a fee.”
Before a COIT increase would go into effect, at least one other governmental body, which oversees finances, would have to pass the increase, Steele explained. Each municipality gets a certain number of votes based on its population. Anderson, for example, has 44.79 votes because it has 44.79 percent of the county’s population. The Madison County Council in this case represents people who live in unincorporated areas.
The county auditor would have to receive at least 50.01 votes, which represents the majority of the county, before the tax could go into effect.
That means if the Madison County Council, with 31.4 votes, or Elwood, with 7.3 votes, passes the increase, the increase could go into effect as soon as October.
Smaller cities and towns, such as Alexandria, with 4.69 votes, Pendleton, with 2.9 votes, and Chesterfield, with 2.23 votes, could collaborate to add up to 50 votes.
Anderson might have some trouble finding a partner to support the measure.
County councilmen John Bostic, D-District 3 and president; Buddy Patterson, D-District 2; Larry Crenshaw, R-at large; and Steve Sumner, R-at large, have all said they would not vote for the increase.
“We went on line with the wheel tax because we didn’t have money to fix roads,” Bostic said. “When we went on the line to do that, we also helped the city because the city receives money from that. We felt like we have done our part to help the city and county. In my opinion, if this tax is going to be passed, it should be passed by the city and Elwood City Council. I think the County Council has done their part.”
Sumner said he did not want to approve a tax when his constituents did not favor one.
“There are far too many viable efforts that could be made,” he wrote in an e-mail response. He listed options such as privatization of services, layoffs and getting grants as alternatives to a tax increase.
Representatives from the Alexandria, Ingalls and Orestes councils said the boards had not discussed the option. Pendleton Town Council President Don Henderson, as well as none of the seven city council members in Elwood returned phone calls about the issue.
Lapel’s council president, Gary Shuck, said the board had also not talked about the issue, but he said the town was in need of some extra help.
“We’re taking a serious look at that because we’re losing so much money on the property tax caps,” he said, adding that Lapel will lose 15 to 20 percent of its budget.
Lapel has 1.39 votes in the COIT council.
“Lapel is mostly residential, and we don’t have a commercial base like Anderson or Pendleton. If we don’t find some way to make up the difference that we lose, the alternative is to cut back on services, and we don’t want to do that.”
If you go:
Anderson City Council
Thursday
7 p.m.
City Council Chambers
The auditor must receive 50 votes to enact an increase. Each municipality’s votes is based on its population:
• Anderson 44.79 votes
• Madison County (representing residents outside of incorporated areas) 31.4 votes
• Elwood 7.3 votes
• Alexandria 4.69 votes
• Pendleton 2.9 votes
• Chesterfield 2.23 votes
• Edgewood 1.4 votes
• Frankton 1.43 votes
• Lapel 1.39 votes
Sources:Jim Steele, www.census.gov
