The end of a long meeting

The last part of the County Council meeting on Tuesday evening was devoted to a discussion of the Local Option Income Tax. Senator Hershman had accepted an invitation to attend the meeting. Today’s Rensselaer Republican recounts much of what went on. I will not try to do a similar report, but rather mention some of the things that struck me.

Several members of the Council have argued that the County should be allowed to choose to whom to give the property tax relief that the LOIT provides. That idea was pretty effectively demolished by Hershman. The law and legal precedents will not allow it.

When we pay our local income tax, the money goes to the state department of revenue. There people sort out how much should go to the various government entities. If you are a resident of Rensselaer, some of what you pay will go to the County, some will go to the City, some will go to the Library, etc. Trying to decide how much each entity gets takes time. As a result, the money that that comes back to the county this year is based on how much was collected two years ago. 

Steve Jordan mentioned that the county is in the lowest five counties in terms of real estate taxes. I am not sure how he gets that number. Today’s Republican has the property tax rates for the county and there is great variation by township and towns because the tax rate depends not only on the county rates but also on the rates of the township or town, school district, library, airport authority, etc. Someone also mentioned that the County is in the top 20 for County expenditures per capita. 

There was a lot of discussion on fairness and tax burden but almost none on how the tax affects behavior. For example, the reduction in the property tax should raise land prices. The after-tax return on owning land rose when the property tax rate decreased, and perhaps this is one of the reasons that our land prices have risen quite dramatically. The same effect should be true for homes, but it is offset by the higher income taxes. It is much easier to be an absentee landlord for farm land than for housing. 

One of the arguments for lowering the LOIT and thereby raising property taxes is that it will shift some of the burden to non-residents. Citizens are always happy to shift the burden to nonresidents. It was suggested at the meeting that even though non-resident property owners get a tax break from the LOIT, we should not be concerned because they employ people who do pay the taxes. However, many people who work in Jasper County do not live here. The vast majority of people who work at Advance Auto, for example, live in other counties. In general, the southern part of the county imports workers and the northern part exports them.

Perhaps the most fascinating thing I noticed was the ability of some to maximize or minimize numbers by how they stated them. If you want a number to seem big, you present it as a total, as in a reduction in the LOIT will raise the burden on property by over $800,000. If you want the number to seem small, you present in per capita terms, as in the proposed reduction in the LOIT will lower the average person’s tax by less than $30. Or, lowering the tax rate by .1% will increase property taxes by 3%. (That is true because the reducing an income tax of 2.9% by .1% is a 3% reduction.)

I was impressed by the political skill of Senator Hershman. I can see why he has risen to positions of leadership in the state senate.

In the comments, Andrew Andree said that he had switched from in favor of lowering the LOIT to being on the fence. If he votes to keep the LOIT as it is, that would probably produce a tie which the president of the Council, Rein Bontreger would break and he has indicated that he would vote to keep the rate as it is. Bret Risner, a candidate for the County Council, was in the audience and it was clear from his reaction to various statements that if he gets on the Council, he will oppose any lowering of the LOIT.

In other news, there is a new business in town, though it likely will mostly serve people from other places. Miss Hall, who recently left employment at the Jasper County Economic Development Organization to become and event planner at Purdue and then moved to the Development Office at Saint Joseph’s College, has struck out on her own with an event planning company.

On Tuesday I also attended a bit of the presentation about cemeteries at the Historical Society Museum. I learned that the reason flowers surround the casket is that before embalming when most wakes were held in private houses, the flowers helped mask the odors of decay. Embalming became common during the Civil War when wives and mothers wanted the remains of dead soldiers to be buried back home rather than on the battlefield.

The tree cutters seem to be finished with tree cutting along Lincoln. On Wednesday they were hauling away the big logs, which I assume will be cut up as lumber. 

The Building Trades House looks almost complete.