(LAWRENCE COUNTY) - In a mostly tense and crowded County Council public hearing taking place last night (July 21st) in the courtroom of the Lawrence County Courthouse, county residents voiced their opinions on LOIT Tax.
LOIT which stands for Local Option Income Tax, to help with current lost county revenue, from house bill 10-01 which is a property tax cap.
Taxes on your adjusted gross income could possibly be raised to a rate of up to 1.25% with .25% to being used as new money to go to public safety, and the remaining 1% to go towards the reduction of county property taxes.
Below, are portions of the powerpoint shown to those attending the Council Hearing last night.
- The Indiana Legislature, through its commitment to reduce property taxes, has placed a cap on the amount of tax each property owner is obligated to pay beginning in 2009. This cap will continue through 2011 and at that point the home owner will pay no more than 1% of assessed value, agriculture and rental properties will pay no more than 2% of assessed value, and businesses will pay no more than 3% of assessed value.
- As a result of this, all government entities who rely on property tax revenue will see a cut i the amount of money they would have normally received to fund their operations. As a result of these mandated cuts the total property tax collected in 2010 will be approximately five million dollars less than what would have been collected if the tax caps were not in place.
What Is LOIT (Local Option Income Tax)
- LOIT Characteristics:
...- Local Governments can diversify their revenue sources.
...- Reduce property tax burden.
...- Provide larger tax "base" - income earners, not just property owners.
...- Not hampered by property tax collection delays.
- Property Tax Releif as a result of LOIT:
1.) Direct property tax relief:
If a 1.25% Income Tax is adopted, .25% of that or about about 1.9 million dollars, will be new money used for public safety. The remaining 1%, totaling 7.6 million, will go toward the further reduction of county property taxes.
2.) Four (4) options for ow this LOIT provides property tax relief:
- A. Property Tax Relief Credit for all taxpayers in the county.
- B. Homestead credit (owner-occupied homes)
- C. Residential property tax relief (homesteads, residential rental, and apartment complexes)
- D. A combination of three above methods.
- Public Safety LOIT:
1.) Pays for public safety expenditures for the county and the cities and towns within the county. County may impose a LOIT tax rate to fund police of fire protection, emergency medical services, corrections, pension payments, or other public safety functions.
2.) Provides indirect property tax relief to the extent the budgets for public safety will not have to be fully funded by property taxes.
- Possible Tax Rates:
1.) A tax rate of up to .25% may be adopted and applied to public safety funding.
2.) A rate of up to 1% can be adopted and applied to the reduction of property taxes.
Why The Council Is Considering LOIT (Effects of Property Tax Caps)
- For your information, when the County General Fund is mentioned you need to know that the County General Fund tax levey (dollars generated by property tax) is roughly $4,500,000. The total County Budget for operating expenses is in the excess of $10,000,000. The $5,500,000 difference is funded from other sources such as CAGIT, riverboat revenue, rental of plaza, user fees, etc.
What The Council Faces:
- Lawrence County Story:
1.) The Council must cut $614,000 from 2010 budget or increase revenue.
- This step would require a personnel reduction of 25 full time employees.
- Possible reduction of employee hours, which would result in fewer hours of operation for the Courthouse,
2.) The Council must cut an additional $200,000+ from the 2011 budget which would require additional personnel cuts or other drastic measures.
What Needs To Be Done To Secure A Solid Future For Our County And Its Citizens.
- Our Choices at the County Level are:
...- 1.) Drastically reduce employees.
...- 2.) Reduce employee benefits at a time when benefits are so important.
...- 3.) Reduce services to the tax paying public by reduction of hours in Courthouse operation.
...- 4.) Reduction of contributions in support of community organizations such as: 4-H Fair, Humane Society, Rural Transit, and others.
...- 5.) Help to fund shortfalls that Bedford, Mitchell, and Oolitic are facing in regard to public safety.
...- 6.) Adopt Local Option Income Tax (LOIT)
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