The Indiana Department of Local Government Finance and the Indiana Department of Revenue have ruled that a local option income tax passed earlier this year that was intended to help fund public safety operations in Monroe County was not valid.
“Monroe County’s public safety income tax rate was not adopted until June 2016,” the two agencies wrote in a letter to Monroe County Council Attorney Michael Flory. “Because the rate was not in place as of May 1, 2016, there is nothing in law that transitions the rate into IC 6-3-6.”
The state began transitioning toward a new local taxing scheme this year that would take effect Jan. 1, 2017. To help make the transition smoother, local governments were barred from passing new tax legislation between May 1 and June 30. The law was misinterpreted in Monroe County, and the four entities comprising the Monroe County Income Tax Council – Bloomington City Council, Monroe County Council, Ellettsville Town Council and Stinesville Town Council – officially passed the new tax on June 14. The state alerted the county of the potential error on June 18.
Despite the conclusion, the county will be able to collect the tax until Dec. 31. But for it to continue into 2017, the tax will have to be passed again by Oct. 31.
The 0.25% tax is expected to generate $7.5 million in revenue, $600,000 more than originally projected. Thirty percent, or $2.2 million, will go toward funding the Monroe County Central Dispatch Center.
After that, $5.3 million will go to Bloomington, Monroe County, Ellettsville and Stinesville, split based on property taxes, unless the income tax council opts to fund requests made by township and volunteer fire departments and emergency medical services. If they do fund those requests, that money would be distributed first.
While waiting on the verdict from the state, the Monroe County Income Tax Council committee, made up of members representing each body in the income tax council, began considering requests from township and volunteer fire departments in the county.
Bean Blossom Township Fire Department and Richland Township Fire Department put in two of the eight requests the income tax council committee heard.
After consideration that included the number of runs from the various fire departments in the county, the council recommended the two fire departments receive $17,000 and $90,000, respectively. Distribution of those funds would be divided into 12 equal installments and applied once per month.
Funding recommendations for township fire departments totaled $391,560.
Originally published in Ellettsville Journal, 2016. Republished here for archival and portfolio purposes.