Senate Enrolled Act 1 has financial implications for Indiana's libraries, including Hancock County Public Library (pictured) and Vernon Township Public Library. Daily Reporter file photo
Senate Enrolled Act 1 has financial implications for Indiana's libraries, including Hancock County Public Library (pictured) and Vernon Township Public Library. Daily Reporter file photo
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Signed into state law earlier this year by Gov. Mike Braun, Senate Enrolled Act 1 introduces sweeping changes not only to Indiana’s property tax system, but also to local income taxes as well.

Under SEA 1, all current local income taxes will expire at the end of 2027 and will be replaced with an overhauled system for 2028 onward. Local income taxes are used by local units of government to fund various programs, such as public safety, economic development, emergency medical services and libraries, among other uses.

Hancock County currently has eligible local income taxes for both Hancock County Public Library and Vernon Township Public Library. At present, the county is getting 0.15% from the special purpose tax for the libraries and 0.05% from county adjusted gross income tax.

Now, county officials are exploring how to fund these programs in the future.

During the Oct. 1 Hancock County Budget Committee meeting, county financial adviser Greg Guerrettaz presented the panel of county council members and commissioners with potential guidance for the new rules.

He suggested that the council allow an increase for the library special purpose rate up to 0.25%, and that it would be distributed based on population. For example, if Vernon Township grows faster than the other parts of the county, the share it receives would reflect that.

Guerrettaz said he worked alongside the executive directors of Hancock County Public Library and Vernon Township Public Library — Dave Gray and Ashtan Bennett, respectively — to come up with a potential idea for a future local tax for the libraries.

“We’ve come to what we believe is a joint solution,” he said.

HCPL’s location at 900 W. McKenzie Road in Greenfield was built in 2005. Its Sugar Creek branch at 5731 W. U.S. 52 in New Palestine opened in 2019.

VTPL has a location at 625 E. Broadway St. in Fortville, where it has been since the 1980s. Its board has chosen a site in Fortville to build a new library — 14,000 square feet of library space next to the Vernon Township offices at 602 Vitality Drive. Also coming is a McCordsville library extension on the second floor of the new NineStar Connect building at McCord Square.

Guerrettaz said with the termination of all current local income taxes, Hancock County Public Library would lose $1.9 million, while Vernon Township Public Library would lose $173,000. They would be left with only the special purpose operating and specific purpose debt funds once 2028 comes around.

He assured council members that income taxes would essentially not go up because of this proposed rate increase. Guerrettaz told county officials that the 0.25% rate would be set at the maximum rate, and that there would be an annual review of the rate by the county council.

If one of the libraries wanted to issue a new debt, it could come to council and have that approved and have some space to work with within the maximum rate.

“If services need to be funded, and we want to give a little bit of a salary increase, we have a little bit of breathing room,” he said.

Council member Kent Fisk said with all the local income taxes dissolving at the end of 2027, the legislation is pushing for counties to raise their taxes to continue funding these services, shifting the taxes from property to income.

“It wasn’t that they were taking away the taxes thinking they were going to stay away; they are taking away those taxes in order to force the counties to raise their taxes,” he said.

Fellow council member Tammy Settergren said the option proposed by Guerrettaz was the best possible option to benefit both of the public libraries in the county.

“This seems like the best plan to benefit the most involved, and that’s what we want to do and the fact that they’re working together on it, I think this is the direction we probably need to head and support them,” she said.

Each library system’s board of directors will hear a resolution pledging its support to this effort, and to urge the county council to increase the special purpose rate.

The council anticipates voting on this proposal in early 2027.
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