Published: July 02, 2008 10:26 pm            

Miami County moves closer to LOIT idea

Officials say property owners would benefit from income tax

PERU — Officials say every property owner in the county would receive benefits from a local option income tax being considered by the Miami County Council.

Following more than two hours of discussion Tuesday, mostly from local residents opposed to a Local Option Income Tax (LOIT), the county council discussed how much a LOIT would be set at and how the funds would be distributed.

A consensus of the council favored implementing a .25 percent LOIT to finance public safety operations and a one percent LOIT to fund local government and reduce the reliance on property taxes.

The council will consider adoption of the tax at its July 16 meeting at 7 p.m. in the G.A.R. room of the Miami County Courthouse. If adopted, the tax would go into effect on Oct. 1. It would mean for every $10,000 earned a Miami County resident would pay $12.50 in taxes. People on a fixed income don’t pay the tax.

Council president Ralph Duckwall proposed 0.3 percent go to property tax relief for individual homeowners, 0.2 percent for rental property and the remaining 0.5 percent to all other property and on personal property.

“This will relieve a lot of the pressure and give us another year,” Duckwall said. “We won’t need to make as many adjustments in the future.”

Councilman Bill Click said this is the best way for the county to go.

“This addresses the major problems and provides some relief,” Click said.

Although residents were opposed to another tax, Peru Mayor Jim Walker and the superintendents of the school districts operating in the county favored adoption of the tax.

State Sen. Tom Weatherwax told those at the meeting that the taxing units in the county would be facing a $1,270,869 decline in revenues next year and $2,563,920 in 2010 as a result of caps on property taxes implemented by the state legislature.

A 1 percent LOIT would raise an estimated $5.6 million in Miami County.

Those property tax caps are set at 1 percent on residential property, 2 percent on rental property and farm ground and 3 percent for all other property.

“The caps are forcing local units of government to look to other funding options,” Weatherwax said. “This saves money for taxpayers, but creates a budget crunch for local government.”

Local units of government will either have to cut spending or find other ways to generate revenue, he said.

“This is no free lunch,” Weatherwax said. “It is changing from property to income taxes.”

Weatherwax said the public safety LOIT, which would generate $1.4 million would free up what used to be paid in property taxes.

Andy Melin, superintendent of the Peru Community Schools, said the 1 percent LOIT makes sense and added the school system already cut $255,000 from the capital improvement budget.

“I don’t see how we can continue to function on the revenue side without a LOIT,” he said. “The bottom line is LOIT is a necessity.”

        

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