Mostly taxes

The County Council met on Tuesday evening. I arrived after the start of the meeting during the first item on the agenda, which was a transfer of funds within the budget of Animal Control to allow training.

The main item on the agenda was a discussion of LOIT (which apparently should be pronounced in two syllables as  Lo It, not as one, which is the way I have become accustomed to think of it.)  President of the Council, Rein Bontreger, said he thought the Council should decide whether to change the Local Option Income Tax in May. Apparently because of changes made by the state, any changes that would take effect for the 2016 tax year need to be made by June. He noted that a reduction in the LOIT would not be a tax cut. Any cut in revenue from the LOIT would be made up with an increase in property taxes. He then asked each member of the Council to speak on the topic.

John Price gave members of the Council and the audience a hand out. He had some data from the state of Indiana website that county income tax collections had gone up even as the rate had been cut. However, the most interesting item on his handout was this: “Indiana’s Constitution requires property taxes to be based on objective standards and has led to the value-in-use method. This is why Meijers and other Big Box stores are claiming they should be taxed like the abandoned, vacant, unrentable K-Mart DARK BOX down the road, the one with no roof. The one that sold for just the land value less demolition costs. Plus they want ten years taxes refunded.” Google “Dark Box Indiana Property Tax” for some newspaper stories on this, such as this one.

Garett DeVries argued that the original law setting up the LOIT was poorly designed. In his comments he noted that although many corporations benefited from the switch from property to income taxes, NIPSCO did not because the law did not allow property tax relief to any entity that owned at least 20% of the assessed valuation in a county, and NIPSCO owns more than 20% of the assessed valuation in Jasper County. He suggested that the three state senators whose districts include parts of Jasper County, State Senators Hershman and Charbonneau and Representatives and Naegele and Gutwein be invited to the next Council meeting. If any of them come, it should make for a very interesting meeting.

There were some interesting comments from members of the audience. One said that the income tax was not always fair. She had a college student doing summer work and they were subject to the state and county income tax even though they earned very little. She noted that they had recently sold a home in Jasper County and it was a hard sell once people from out of the county recognized how high the county income tax was. Another person had recently moved to the county. He was happy with the much lower property taxes he had here but said that the higher income tax offset the benefit of lower property taxes.

The discussion often mentioned C corporations. I asked exactly what that was and was told that all corporations start out as C corporations but people have the option of changing to an S corporation, which taxes them differently, more like a partnership. A disadvantage of an S corporation is in the way the tax code handles losses. They are more favorably handled in the C corporate form. All large corporations with many shareholders are C corporations.

As I have been trying to make sense of the issues involved here, I have come to realize just how complicated and complex local taxes and finances are. On Thursday I attended the PTABOA (pronounced Pita Boa and standing for Property Tax Assessment Board of Appeals) meeting and after the meeting talked to the assessor a bit.

She gave me a copy of what my next property tax bill that has the tax rate broken down by entity but not yet any dollar amounts. If you live in Rensselaer (Marion Township)--there is now also a Rensselaer (Newton Township)--you will pay a total of 1.5677% on the assessed value of your property after deductions. That rate is from six different entities. In order of size, they are school .6186, city .6038, county .2644, library .0659, airport authority .0122, and township .0108. Each of those entities is further broken down into a variety of subcategories.

Trying to find basic information such as how much income tax and property tax are collected in the county requires searching through a variety of web pages. Here is a page that lets one see the receipts for any county, showing all the monies coming into the county government through taxes, grants, intergovernmental disbursements, etc. I loaded the page for Jasper County in 2016. Can you make sense of it?

The County Council meeting was very interesting and informative and I do not think I have justice to it in this summary. However, it is the best I can do. Maybe I can do a followup post with a few more details later.