A new county income tax intended to offset property taxes received mixed approval from the Putnam County Council Wednesday.
On a 4-3 vote, the council agreed to consider a three-part County Option Income Tax at a rate of 1.55 percent for all Putnam County wage earners when they meet again in September. If approved, that tax would go into effect Oct. 1.
Council members Mitch Proctor, Jay Fogle and Darrel Thomas voted against the three-part tax, while council members Keith Berry, Roger Deck, Don Walton and Larry Parker agreed that the tax could help property owners.
Their vote came after discussion of the tax proposal with Sen. Connie Lawson and David Bottorff, executive director of the Indiana Association of Counties.
Lawson said the local option income tax is a solution to high property taxes that state lawmakers hope local government will take.
"We know each county is unique. Each county has its set of problems, and the answers to those problems shouldn't be coming down from the state," she said.
Property taxes are assessed on a local level, raised locally and spent on local needs.
"That's why it should be considered in Putnam County, so you can take your own county's problems into account when you make this decision. You can be providing immediate property tax relief to your citizens," she said.
Bottorff explained that the three parts of the tax can be enacted separately or together, and recommended taking Option A, B and C together.
Option A freezes the tax levies, and would allow Putnam County to assess a .3 percent income tax on residents to make up the difference for future increases in taxes.
Option B is dollar-for-dollar property tax relieve with a 1 percent cap. That option can be applied to homesteads only, homesteads and rental property, or property tax replacement credit.
Option C combines Options A and B, cut also sets a .25 percent income tax to use on the broadly defined area of "public safety."
Added together, the tax will come out to about $1.55 for every $100 of adjusted gross income for county residents.
But council members also noted that income earners will be paying more on the LOIT than it will offset in property taxes. And for those people who own property here, but live and work elsewhere, they will only receive the break from property taxes, and will not pay back into LOIT.
The difference of opinion from the county concerned Option C, which has funding designated for public safety that is intended to help with police, fire, ambulance, and other departments who are strapped for cash and equipment. The county could also use it for facility improvements related to public safety.
Council member Fogle said he could not see the benefit of passing that option, and he would not vote in favor of adding Option C.
"I see (county employees) driving around in new vehicles and SUVs all the time," Fogle said. "I've said stuff to people before and I get smart aleck answers. So I'm not in favor of C."
"I agree with you," council member Thomas said, but added he sees the potential for that money to help with operating funds for the new Emergency Operations Center, and possibly a third county court.
When it cam to a vote, Fogle, Thomas and Proctor sided against LOIT, while Berry, Deck, Parker and Walton gave it four votes to be advertised for final adoption.
The council will consider the ordinances during their 6:30 p.m. meeting Tuesday, Sept. 18 in the courthouse annex.
The public is invited to attend, and public comment on the LOIT is welcome in advance of the meeting.