The jail tax question is posing quite a quandary for the Jennings County Council.
The council spent nearly two hours during a work session Wednesday, June 26, discussing the issue without coming to a resolution.
The debate is over whether to completely eliminate the special income tax, scale back the tax rate or keep it as it is currently.
"I say we cut the tax rate back to one-third or one-fourth of what it is now," said Howard Malcomb (R-at large), council president. "We can always adjust the rate every year. But if we eliminate it, we'll have to start all over."
The County Council last October enacted the jail tax, a special income tax, after the Indiana General Assembly passed a bill in March 2018 to allow the county to consider it. Gov. Eric Holcomb then signed the legislation into law.
The jail tax took effect on Jan. 1 at a rate of .65 percent of gross adjusted income and is expected to generate $3.2 million this year.
The jail tax revenue is designed to fund a proposed new county jail, which proponents say is needed because of severe overcrowding at the current jail. The controversial project, with an estimated cost of $28 million, has been put on hold since last November.
The jail tax revenue can only go toward a new jail, according to terms of the state law. However, if the jail tax is eliminated any funds collected would go to the county's Rainy Day Fund. From there, the money could be used for anything related to county government.
"Any discussion is premature until we decide what we are going to do," said Charlie Weber (R-District 4), referring to whether the county is going to construct a new jail or not.
"That is the commissioners' decision to make," said Dave Woodall (R-at large). "The commissioners and Gregg (Wilds, the county's maintenance director) need to get together and tell us what they are going to do."
Malcomb opined that the current jail should be upgraded instead of the county constructing a new facility.
"In my opinion, I think we should repair the jail we have," he said. "It's pretty clear that the voters don't want a new jail. But I would like to see an estimate on what those repairs would cost before we vote."
Sheriff Kenny Freeman is opposed to constructing a new jail, an issue that he campaigned on when he won last year's election.
Freeman told the council he and his staff have already made some repairs, but considerably more are needed - including a new cooling tower for the jail's HVAC system.
"The average life span of a county jail in Indiana is 29 years," the sheriff said. "Ours is not even 20 years old. So why should we replace it if we can get the jail population worked out?"
The number of inmates has varied from 130 to 184 since he has been sheriff, Freeman said. The jail's rated capacity is 104.
Mike Gerth (R-District 1) suggested the possibility of raising the Local Income Tax rate to counter a reduction or elimination of the jail tax, thus providing the county with a funding mechanism for upgrades to the current jail.
Woodall is the only current council member who voted to enact the jail tax last year.
"Our job was to give the commissioners an avenue to fund construction of a new jail," he said. "Now the new sheriff (Kenny Freeman) doesn't want it. So I say, let's rescind the jail tax. Then the money will go to the Rainy Day Fund and we can use it for anything.
"(But) everyone knows we will have to build a new jail eventually. We're just kicking the can down the road," he added.
"Everyone is entitled to an opinion," Malcomb replied.
Council members were unclear as to when they had to vote on the jail tax for any changes to take effect next year.
"Do we have to vote by October, by December, or what?" Weber asked.
"I thought it was July, but I'm not sure," said Mandy Creech (R-District 2).
Weber said the council needs more information before it can act.
"We're just hypothesizing, talking about stuff we don't know about," he said. "We need to get the experts in front of us."
The council is considering contracting with Baker Tilley Municipal Advisors, a certified public accounting firm with an office in Carmel, to help on the jail issue. Councilors are hopeful that Baker Tilley representatives will be at the council's next meeting if arrangements can be worked out.
The council's next meeting will be Tuesday, July 9.
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