GREENFIELD — Greenfield City Council is considering enacting a Cumulative Capital Development tax starting next year, which could generate three quarters of a million dollars for the city each year.

The proposed tax of 3.3 cents per $100 of a property’s gross assessed value would apply to residential properties valued under $200,000. Those owning homes with a net assessed value of $150,000, for example, would pay roughly $22 total a year.

Those with homes valued over $200,000 would pay no additional taxes, although a portion of the taxes they already pay could be diverted towards the proposed CCD Fund.

Business and industry properties would be taxed at the same rate of 3.3 cents per $100 of gross assessed value, which means the owner of a property valued at $100,000 would pay an additional $330 each year.

“We’re not really going to get a lot of new money from residential customers, but mostly from business and industry,” said Buzz Krohn, of Krohn & Associates, who has served as a financial consultant for the city of Greenfield since 1986.

He shared an extensive explanation of the proposed CCD tax at the March 13 council meeting, where members ultimately voted 6-1 to pass the tax on first reading, opening it up for a public discussion and final vote March 27.

Councilman Anthony Scott voted against he tax, which would be enacted at the start of 2025.

Krohn said the purpose of a CCD tax is to create a Cumulative Capital Development Fund, which can be used to cover a variety of expenses or to save up for a rainy day.

Krohn said it would be wise for the city to establish such a tax to offset the city’s diminishing property tax rates, and to prepare for the eventual end of revenue from local TIF districts.

He said the proposed CCD tax could generate about $750,000 for the city each year.

Mayor Guy Titus said Greenfield is perhaps the only city in the region — including Marion and the surrounding counties — to not take advantage of CCD funds.

“It was a missed opportunity. It was something that has always been available to us and we didn’t know it was available,” Titus said at Wednesday’s meeting.

Krohn said the city could have potentially brought in an additional $7.2 million over the past 12 years if the CCD tax had been implemented back in 2012.

Imposing the tax would put the city on stronger financial footing, he said, bringing in a quarter of a million dollars each year that could be used for a wide range of expenses like city services and capital improvements.

Krohn said the proposed tax wouldn’t be the answer to funding all the city’s future needs, but it would certainly help.

He said it’s not an overly significant amount for homeowners, who have seen property taxes consistently shrink an average of 2.3% each year over the past 12 years.

“It really doesn’t affect our residential tax base in any significant manner,” said Krohn, who said the bulk of tax income would come from the owners of business and industrial properties.

Krohn advised the council that such a tax can go a long way in offering the city financial stability, and the ability to pay for future necessities and enhancements.

“It’s another financial tool for our toolbox,” he said. “If nothing else we can accumulate money we can buy down future bond issues with, and if we’ve got a project we want to do we can save up money to do significant projects without issuing bonds.”

Krohn said the CCD funds could go toward capital projects like big equipment purchases or upkeep services like road paving, in addition to future “quality of life” enhancements.

“It’s a pretty broad spectrum of potential uses,” he said.

All city departments are experiencing growing pains, said Krohn, and the CCD revenues could help with that by supporting the upkeep, expansion or replacement of city buildings and equipment.

“It’s basically giving us between half a million and $750,000 a year in additional resources to fund what is now a $30 million city budget,” said Krohn, who called establishing a CCD tax “a smart move.”
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