The Jackson County Council has begun the process of implementing a local option income tax of one-quarter of 1 percent to help fund public safety services and reduce property taxes for all.
It’s anticipated the tax, which would become effective Jan. 1 if enacted, would create more than $1.2 million in revenue for the county and $1.3 to $1.4 million for the city of Seymour. The county’s three towns, Brownstown, Crothersville and Medora, also would receive revenue from the tax also known as LOIT.
The 0.0025 rate would cost wage earners 2.5 cents of every $100 they make while on the job.
The two ordinances enacting the tax — the public safety portion and the property tax relief part — passed on first reading during a county council meeting Wednesday morning. The council plans to conduct a public hearing about the proposal at 6 p.m. Sept. 12 at the courthouse annex at 220 E. Walnut St. in Brownstown.
After Wednesday’s meeting, county council President Charlie Murphy said the tax is being considered as a way to raise revenue at a time when the council is limited by the state in its ability to increase property tax revenues.
“We’re either going to have to cut services or we’re going to have to generate revenue somehow,” Murphy said.
The new revenue can be used to fund operations for the sheriff’s department and jail, fire departments, ambulance service, community corrections and even court security, he said. Funding those operations with income tax would shift those expenses out of the general fund.
Councilman Brian Thompson said the new revenue would shift the tax burden from property owners to income earners and allow the county to keep emergency services up-to-date.
Seymour Mayor Craig Luedeman attended Wednesday’s meeting to see if the council was going to consider enacting the tax.
“It will definitely help us,” he said. “We can do a number of things. We can pay for health insurance. We can pay for new vehicles, fire equipment, their wages, anything.”
That also includes pensions, he said.
Luedeman said he thinks the police department doesn’t need any new manpower with the possible exception of adding some reserves who are not paid.
“We would split it half and half,” Luedemen said of the revenue generated by the proposed tax. The other half would go to support fire services.
The property tax relief portion would provide credits that would be split three ways between the owners of homesteads (owner-occupied homes); residential property, long-term care, agricultural property and other tangible property; and rental property and non-residential property.
Thompson said he felt the weight of the decision was enough to justify a public hearing. The council could act on the ordinance at that time or wait until the regular meeting at 6 p.m. Sept. 21.
He also said if the tax is enacted, a person making $50,000 a year would pay $9 more in state and local income taxes per two-week pay period than they are paying now. That could vary depending upon filing status.
The property tax relief also would vary depending upon where the property is located. A homeowner in Jackson Township, for instance, with a home valued at $100,000 would see a decrease of about $40 a year on their property tax bill.
Jackson County already has two other incomes taxes. The county adjusted growth income tax rate is 1.60 percent, and the county economic development income tax rate is 0.75 percent, according to the Indiana Department of Revenue.
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For information about local option income taxes, visit in.gov/dlgf/7343.htm.
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What: Public hearing about a proposed local option income tax in Jackson County
When: 6 p.m. Sept. 12
Where: Jackson County Courthouse Annex, 220 E. Walnut St., Brownstown