State halts Hancock County income tax hike to pay for new jail

The Hancock County Council last Wednesday introduced an ordinance to modify the local income tax rate for 2019, changing it from 1.74 percent to as much as 1.94 percent. The increase could’ve collected revenue from residents’ paychecks to pay for a new county correctional facility. Indiana counties can increase their income tax rates to not exceed 0.2 percent to cover the costs of a new correctional or rehabilitation facility, according to a law enacted earlier this year.

But less than a week later, the county’s attorney, Ray Richardson, received notice from the Indiana Department of Local Government Finance that pointed out a county can only change the income tax rate once per year, as stated by Indiana law.

The council last month voted to raise the local income tax rate from the current 1.7 percent to 1.74 percent in order to cover the Hancock County 911 Center’s operational budget. So, the council’s new proposal to raise the income tax rate a second time to cover construction of the new jail would have violated state law, state officials said.

At the request of Council President Bill Bolander, Richardson and Hancock County Auditor Robin Lowder contacted the Indiana Department of Local Government Finance to see if the county could rescind the 0.04 tax rate increase for the 911 center’s operational costs, which is set to begin Jan. 1, and replace it with the jail tax increase.

But Richardson received an email from a finance department representative on Wednesday evening. It stated that after discussing the situation with the finance department’s legal division, the state cannot rescind the 911 center tax rate increase.

Therefore, a public hearing that was slated for Monday about the proposed tax rate hike is canceled, Richardson said.

Bolander said on Thursday that despite the state’s ruling on the tax rate, it won’t derail the county council from figuring out financing options for a new jail. Bolander said the council plans to discuss other options with the county’s financial consultant, Greg Guerrettaz, at November’s county budget meeting.

“It’s not going to stop us moving forward,” Bolander said.

According to Indiana Code, if a county adopts a tax rate increase after Dec. 31 of the preceding year and before Sept. 1 of the current year, the tax would take effect on Oct. 1 of the current year.

The council decided to pursue the income tax increase after hearing RQAW — the firm the county has paid to design a new jail — pitch a plan to build half of an inmate-housing pod on land commonly called the county farm, located along U.S. 40 between County Roads 400E and 500E. The pod would accommodate overflow at the current jail until and while a new facility is constructed on the same site. The plan states the building would be operational within a year’s time, cost $10.5 million and house about 158 inmates.

Bolander said building “half-a-pod” would help alleviate space in the overcrowded Hancock County Jail, while also letting the council spend money on a structure that would later become a complete facility.

The current jail had 247 inmates in the 157-bed facility on Monday morning, said Maj. Brad Burkhart, chief deputy of the Hancock County Sheriff’s Department.

Meanwhile, the Hancock County Board of Commissioners on Tuesday approved a $100,000 contract with RQAW for site analysis of the county-owned farmland, where the design firm has proposed putting the new jail as well as a new sheriff’s department administration building.

The three-member board passed the resolution 2-1, with commissioner Marc Huber voting against. The county council previously appropriated the $100,000 from the county’s rainy day fund.

“Me personally, I’m not willing [to approve] using the money to spend for a $100,000 study out there on just ‘ifs’ and ‘buts’ when we have needs that need to be addressed right now,” Huber said. “That’s my two cents about it.”

The site analysis by RQAW will include a geotechnical report on the county farm property north of U.S. 40, as well as studying the existing inventory and surveying the south side of the county farm.

Brad Armstrong, commission president, said he’s not presently supportive of putting a jail at the county farm, but believes it’s wise to assess the farmland for any type of future development. Some county leaders have previously expressed an interest in building a 4-H fairground on the land.

While the council will discuss financing options next month to build the “half-a-pod,” Armstrong said he’s been looking at other temporary options — ideas too preliminary for him to discuss in a public meeting, he said.

Armstrong and Huber have both said they’re still supportive of a proposal to put a new jail and a temporary structure to house inmates in downtown Greenfield. The majority of the county council isn’t in favor of bringing modified semitrailers to house inmate overflow — an idea proposed by Burkhart back in July — so Armstrong said it’s unlikely the council will finance a downtown temporary facility.

“Our role is to propose needs, but they control the purse strings,” Armstrong said. “And council is choosing to use the purse strings to propose where this facility is built. That’s what’s going on.”