By Jessica Kerman, Herald Bulletin
ANDERSON - In a unanimous vote, the Anderson City Council approved a resolution to increase a countywide income tax.
During a more than four-hour meeting Thursday night, it took the council 30 minutes to have a public hearing and adopt a resolution that increases the county option income tax, or COIT, by .25 percent.
Jim Steele, financial consultant and former controller for the city of Anderson, said the city needed the tax increase to make up for more than $6 million in revenue losses it will endure over the next two years because of the property tax reform bill, which the Indiana General Assembly passed in March.
The city's vote will be sent to County Auditor Kathy Stoops-Wright, who attended the meeting Thursday night. She will then notify other government units in the county of the vote, and they will have 30 days to vote for the measure.
The countywide tax would be enacted if a city such as Elwood, or a couple of smaller communities such as Pendleton and Alexandria, were to also adopt a resolution to increase the same tax.
The council's resolution calls for the elimination of the county economic development income tax, CEDIT, of .25 percent, and adds a .25 percent COIT for Madison County to increase the homestead credit percentage and a .25 percent COIT for public safety.
The public safety money adds the extra percentage onto the taxpayers' bills, Steele explained. While the label of the tax indicates it will be used for public safety, it does not necessarily have to be used for public safety, Steele said. The money goes into the general fund for the city, which also is used for other expenses such as salaries.
Steele said the tax would get the city through 2009 without a projected deficit, but in 2010, Anderson will be $2.5 million in debt, even with the tax.
Art Pepelea, R-District 5, said he wanted a long-term plan for the city that would not rely on other units of government.
Steele said the city would have to reduce services, charge user fees or lay off employees to make up the difference without the tax.
"As long as people expect services, they're going to be taxed," said Rick Muir, D-at large. "People want trash pickup. They want the fire department to protect them. They want the police department to protect them. They want good power and water. ... This does allow the city to give the level of services that people in Anderson deserve and expect. If we don't pass this tonight, you'll see we're going to pay somewhere."
Two members of the public spoke to the council about the issue.
Jim James said the people in Anderson were suffering because of the poor economy and more taxes would only add a burden onto them.
"The state legislature put a shaft on the local government big time," he said.
James said he hoped the city was working with the county and other units of government to reform its spending habits by combining services and needs.
"If you pass this tax, you need to sit down and consider reforming city government," he said.