A local government finance expert says Grant County’s tax rate is among the highest in the state, leaving limited options to increase revenues.
John Ketzenberger, executive director of the Indiana Fiscal Policy Institute, spoke Monday at the Marion-Grant County Chamber of Commerce’s monthly seminar on government affairs. The Fiscal Policy Institute is a non-profit, non-partisan organization that seeks to inform and educate local officials about economic legislation.
Ketzenberger said his two primary topics at the seminar, which took place at the Ivy Tech Marion campus, focused on several recent studies about local option income tax and business personal property tax and “how Grant County’s situation plays in with what the legislature has done over the last several sessions.”
“I think it’s important for a couple of reasons, one being that this is a high local option income tax community,” he said. “Grant County has added 2.25 percent to its personal income tax and so the effective rate is 5.65 percent, which makes it among the highest in the state. It’s in the top 10 percent of income tax in the state. It doesn’t have a lot of flexibility to add additional tax revenue in that regard.”
Ketzenberger said it was also important for local officials to understand some changes in the business personal property tax made by the last legislature.
“The business personal property tax measures that were passed by the last legislature gives local governments the opportunity to forgo the business personal property tax, which is essentially, if you think about a factory, all of equipment and machinery in the factory has a tax paid on it,” he said. “If you think about Grant County, there are an awful lot of companies here, industrial companies, and so Grant County gets a lot of revenue from the business personal property tax.”
Because of that fact, Ketzenberger said it will be difficult for Grant County to voluntarily end the business personal property tax.
“It will be hard for Grant County to say ‘No, we don’t want to collect that anymore,’ because they don’t have a lot of local option income tax to make it up with. You don’t have a lot of property tax to make it up with because you’re already at the caps or are very close to the caps, and so you’ve got a real difficult atmosphere for local officials, county officials, city officials to continue to provide services at the same time they’re losing tax revenue.”
Ketzenberger said his organization is a not-for-profit, nonpartisan organization that doesn’t “proclaim to be conservative or liberal.”
“We’re funded by members who choose to join, we have about 35 including the Growth Council here, and we do the research that we hope will bring information to public policy questions,” he said. “Hopefully legislators or local officials will find that information useful when they have to make policy decision like whether to raise taxes or tax services. It means a lot for us to have people who represent local government and local developments in our organizations.”
Ketzenberger said he regularly speaks at community events to give local officials a well-rounded fiscal perspective.
“Mostly people are interested to hear what’s going on in their community from a fiscal perspective because sometime it’s a little hard to get context in that,” he said. “That’s what I try to bring and to just find out what it means in general to what’s going on.”
The Chamber hosts government affairs committee seminars every month, and Chamber President Charlie Wallace said they have had a good response from the public.
“Obviously what happens in the legislature is important to everybody in Grant County and throughout the state so we’re just trying to do our part to keep up and keep our members informed about what’s going on in the statehouse,” he said. “We’re very happy, we have a regular committee that meets and then we open this up. We have a very good response to our government affairs committee.”