Published: June 29, 2008 10:53 pm            

Miami County considers new tax

Local option income tax would help fund public safety expenses

PERU — With a projected loss of $2.5 million in property tax revenues by 2010, the Miami County Council is considering passage of a local option income tax to provide revenues and property tax relief.

Retiring State Sen. Tom Weatherwax recommended to council members earlier this month that they consider adopting a Local Option Income Tax to cover operating expenses for public safety and to provide tax relief and cover revenue shortfalls.

Weatherwax recommended a .25 percent LOIT to fund public safety and a 1 percent LOIT for property tax relief.

If adopted at the maximum of 1.25 percent, it means Miami County residents would pay $12.50 for each $1,000 earned.

In order to take effect next year, the Miami County Tax Council has to take action by Aug. 1.

The council has set a public hearing on adoption of a LOIT for 7 p.m. Tuesday in the G.A.R. room of the Miami County Courthouse. A vote on implementation of the taxes could take place at the council’s regular meeting on July 15.

“You have the option of cutting the budget or a combination of spending cuts and a new taxes,” Weatherwax said.

A .25 percent LOIT is expected to generate between $800,000 and $900,000 per year.

Council member Bill Click said he is hopeful the LOIT will be approved at the maximum of 1.25 percent.

“The numbers are still a little vague,” he said of revenue projections. “With the new jail under construction and wanting to add a third court, we definitely need to add the public safety tax.”

Click believes the county should go for the maximum LOIT tax allowed by the state to provide as much property tax relief as possible.

“If we have to do it, we should go for the max,” he said. “There has been surprisingly little reaction. We want to get input from residents.”

Click said the council will have to determine whether or not to adopt the LOIT and how to distribute the funds.

Last year, Howard County adopted a .50 percent LOIT to provide dollar-for-dollar property tax relief for residential property owners. The result was an additional 25 percent decline in property taxes this year.

Click said a lot of rental properties have gotten hit hard with property tax increases, and if a tax is passed in Miami County, some relief should be provided to landlords.

“I would predict the council will adopt the taxes,” he said. “I won’t predict the percentage or how the funds will be distributed.

“This has the potential to help people on fixed and low incomes,” Click said.

Ken de la Bastide can be reached at (765) 454-8580 or via e-mail at ken.delabastide@kokomotribune.com



If you go:

• What: Miami County Council meeting on a local option income tax

• When: 7 p.m. Tuesday

• Where: G.A.R. room of the Miami County Courthouse

        

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