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Decision delayed on Local Option Income Tax

Wednesday, October 17, 2007

A decision on adoption of a Local Option Income Tax in Putnam County has been delayed to November by the Putnam County Council.

The vote was anticipated Tuesday evening, and more than 20 area residents attended the council's regular monthly session to hear discussion and offer their own input.

But the discussion started with council member Keith Berry making a motion to table any action on LOIT, citing an announcement by Gov. Mitch Daniels that he will reveal a plan for statewide property tax relief in early November.

"I don't think this council wants to do anything to hurt Putnam County," Berry said, suggesting that Daniel's proposal may make any local action unnecessary. "I don't want to do anything until we see what these plans are."

The Local Option Income Tax is a measure offered by state officials to allow counties to raise much-needed funding on a local level through an income tax on all resident income-earners. One part of LOIT offers dollar-for-dollar "property tax replacement" while another part has a temporary "freeze" of property taxes. However, schools corporations, which account for about 80 percent of property tax bills, would be exempt from that freeze. A third option in LOIT would allow for a "public safety" tax.

Berry's motion to table the decision received a second from member Jay Fogle, and after much discussion, a unanimous decision to wait until November for a vote.

However, some members of the audience said they were disappointed that adoption of LOIT was still a possibility.

"Stand up for the public and vote it down," Ron Clearwaters told the council.

Bette Bertram concurred, saying she believes most people do not want the council to adopt LOIT.

"I know we have to pay for services," Bertram said. "That is not a problem. But I would have liked for you to put it to a vote and gotten rid of it."

A petition from a Fillmore resident also contained 119 signatures of residents against LOIT.

Council member Larry Parker said he has had more phone calls and contacts about the LOIT issue than any other topic, and most of his callers were opposed to the tax.

"It is not very clear on how much it will cost or how much it will reduce property taxes," Parker said.

Don Walton said he talked to officials from many other counties at a recent meeting of the Indiana Association of Counties, and most of those people are taking a wait-and-see stance to see what the governor and legislature will do for property tax relief.

Roger Deck said he, too, has had mostly calls opposed to LOIT, while farmers have been advocates of it. He agreed that tabling the issue was best on Tuesday.

However, council member Darrel Thomas said he was ready to vote on LOIT.

"I'm in favor of voting to see what would happen, because I feel it wouldn't pass," Thomas said. "Do you want to continue with it hanging over our heads for another month or two?"

Thomas also emphasized that he is in favor of "reducing" property taxes, but not of "replacing" it by taxing another source.

Fogle agreed. "We can't tax to get out of taxes."

Council president Mitch Proctor agreed that waiting to see if the state has a solution may be the best course of action. But he is concerned the state leaders do not seem to know what to do either.

Deck said he was concerned that additional delays could, if it is adopted, lead to a large hit on paychecks if a new income tax is retroactive to Oct. 1.

The tax was initially scheduled to begin Oct. 1, but auditor Stephanie Campbell said recent extensions by the state set the effective date as Jan. 1 if the county does not adopt LOIT until after Nov. 15. The next regularly scheduled county council session is Tuesday, Nov. 20.

Resident Bob Albright told the council he was concerned because he has heard the council talking about taxes for months, but has not heard any talk of reducing spending.

Other residents agreed that spending seems to have gotten out of control in local government.

But council member Fogle said next year's county budgets were approved at about the same level as the current budgets. The only major increase came in a state-mandated increase in child welfare.

"If you had sat here during the two days of the budget hearings, you would have heard a lot of things getting cut," Fogle said. "Is there waste in some budgets? Probably, but we cannot divine that because we don't work in those departments."

In other business, the council:

* Granted tentative approval of a highway department request to appropriate $100,000 for road resurfacing and $25,000 for stone. Final approval of the additional appropriations will be considered in November.

* Reluctantly approved $50,000 toward the road resurfacing for old Bridge 159 at Reelsville as part of that bridge preservation project. The council learned that the bid for that rehabilitation project came in at $999,999. According to the project plans, the state will pay for 80 percent of the restoration project while the county must pay 20 percent.

* Approved the appropriation of $39,220 in Department of Correction money for operational expenses at the Putnam County Jail.

* Approved an $8,000 appropriation for the microfilm department to purchase a new camera to replace an old camera that no longer works and is not repairable.

* Voted to appropriate $203,896 in federal grant money for use by the Aviation Commission at the county airport.

* Approved a part-time pay rate of $10 per hour up to $10,000 for a data collector in the Reassessment Department.

The council regularly meets on the third Tuesday of each month at 6:30 p.m. in the courthouse annex, 209 W. Liberty St., Greencastle.

The meetings are open to the public.



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