ANDERSON — For the second consecutive year, state Sen. Mike Gaskill, R-Pendleton, has introduced legislation to allocate the 1% food and beverage tax revenues by township.
The proposed legislation would mean revenues would be divided between the 14 townships in Madison County based on population.
The county would create separate funds for each township for the placement of the revenues, and the Madison County Council would determine how those funds are distributed.
Gaskill said the projects could extend into more than one township and would also allow school districts to request funds for safety and vocational education projects.
“This would not increase the tax rate,” he said of the current 1% rate. “The cities and towns could put a project before the county council for funding and explain how residents would benefit.”
Gaskill said since the Madison County Council voted to implement the tax they should have more influence on how the funds are spent.
“It will create more competition among local units of government,” he said.
Gaskill said the proposal allows the Madison County Council to use the funds to construct a new jail.
“This would give more options on how the food and beverage tax revenues are used,” he said. “It could help schools, fund a jail or road and bridge projects."
Ben Gale, president of the Madison County Council, said Monday he is aware of the legislation.
"The proposed bill seems to remove obsolete language and provide more flexibility for the County Council to spend food and beverage tax money more effectively to serve the needs of the county," he said.
Based on the 2019 census figures, 43% of the population resides in Anderson Township, 11% in Fall Creek Township, 9% in Pipe Creek Township and 7% in Monroe Township.
Those four townships are where the county’s largest communities by population are, including Anderson, Elwood, Alexandria and Pendleton.
Duck Creek and Boone townships have the lowest number of residents in the county.
Since 1989, there has been a 1% food and beverage tax, which was implemented originally to finance a convention center in Anderson.
At one point, the county received 40% of the revenues to pay for the juvenile detention center, with Anderson receiving 60% of the revenues.
Currently, Anderson receives 70% of the tax revenues and Madison County is provided with the remaining funds to be distributed to the county and local communities.
Anderson uses its share of the tax revenues to finance the budget for the Economic Development Department.
Figures provided by the Madison County Auditor’s Office show Anderson received $1.4 million in 2020 and Madison County received $635,000.
Gaskill said his legislation has a slim chance of passage in 2021. A year ago, the chairman of the Senate Tax and Fiscal Policy Committee declined to have a hearing.
The Senate in 2020 voted to consider the proposal during a summer study committee, but it wasn’t approved by the Indiana House.
The food and beverage tax generated approximately $2 million for the county in 2020.
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