Public Safety Local Option Income Tax passes unanimously in Henry County

The tax will be levied against a person's adjusted gross income, with a maximum rate of 0.25 percent, according to information distributed by Umbaugh and Associates, a public accounting firm that works for the county. Gross income is money made before taxes are taken out.

For instance, if a household had an adjusted gross income of $25,000 per year, the tax will cost that family $62.50 per year, or $5.21 per month.

More than 100 people attended the meeting, which was held in the W.G. Smith Building of Memorial Park. Members of the public who spoke at the hearing were given a three-minute time limit.

Henry County Council President Nate LaMar said of the 14 residents who pre-registered to speak during the event, seven were against the tax and six were in favor of it.

"Nobody wants to raise taxes," LaMar said. "But the county council and city council each know we had no choice, due to the property tax caps by the state legislature which took effect in 2009, and then were enshrined by Hoosier voters into the Indiana Constitution by the 2010 ballot question, and resultant declines in revenue to both the county and the city. On the county level, these budget cuts have affected the sheriff's department more than any other department."

Steve Peckinpaugh was one resident at the meeting against the tax.

"It is the regressive nature of the tax I oppose as it is further saddling the private citizen with more burdens," Peckinpaugh said.  "The county is broken and losses are mounting, for example providing post-retirement health care."

Most residents present at the meeting who objected to the tax did so because they doubted its need, whether or not the income generated would be used effectively, or did not want to bear another financial burden.

New Castle resident Doug Cheeseman told both council members that he opposed the tax due to the county turning down some business opportunities.

"You turned down an asphalt company that would have benefited this county," Cheeseman said.

During the meeting, one council member said that the impact of the tax was  minor; comparing it to missing out on a pack of cigarettes, a soft drink or a couple beers each week.

Henry County Council member Richard Bouslog said he voted in favor of the tax because it would help meet ongoing revenue needs.

"I thought about the potential negative effect on my 92-year-old mother," Bouslog said. "The state only gave us one choice. We're always reacting to what the state does."

Previously, an Umbaugh associate said the LOIT tax was allowed by Indiana not because of an increase in spending, but because of decrease in revenue.

Council members said that city and county governments will have a great degree of flexibility to use the funds within the area of public safety. For example, New Castle Mayor Greg York said funds could be used to hire a police officer, but county and city uses might differ according to restrictions of each entity.

Other uses might include police and law enforcement systems, firefighting and fire prevention systems, emergency ambulances and emergency medical services, emergency action for environmental clean ups, probation programs, community corrections programs, juvenile detention centers and facilities, the Henry County Jail, communications systems or enhanced emergency telephone systems, medical and health care expenses for inmates, and pension payments for law enforcement and public safety personnel.

Most council members said they disliked having to approve the measure, but said the revenue was needed.

"We've cut every department's budget," said New Castle City Council Vice President Sandra Bertram. "It (the LOIT tax) is worth it."

Rob Davis, who lives north of New Castle, was one resident who did not want the tax.  

"When is enough enough?" Davis asked. "How do we prevent the co-mingling of these funds? Desperate times require desperate measures. We have to respond to this."

LaMar agreed that times are desperate, but had a different take.

"This has been a very difficult," he said.  "If you compare us with any of our neighbors, we have the lowest property tax per capita levy. The state shifted the burden to income tax. But we are the 16th poorest county in Indiana. We are a poor and aging county."

However, LaMar said Henry County government is the most efficient county government in east-central Indiana, based on total levies and population to county employee ratio.

Even though LOIT tax revenue must specifically applied to public safety items such as law enforcement, some residents were not satisfied.

Henry County resident and Memorial Park Board member Jeremiah Morrell questioned, as did other residents, how income needs have not been adequately addressed by the county for a number of years.

"I challenge you to really look at what you're doing," Morrell said.  "I really question some of the accounting you've done."

Members of both councils agreed with the citizen's concerns, but at the same time, members from both councils expressed frustration with the county's inability to meet public safety personnel needs.

County Council member Robin Reno-Fleming maintained that New Castle and  Henry County governments had already absorbed great cut backs.

"We've looked into alternative measures," Fleming said.  "Very few of us get overtime. We haven't taken a raise in 15 years. We have tried to fix this problem. We wanted to make sure we understood the effect of the circuit breaker. We have adjusted health benefits."

Still, many residents voiced opposition.

"How many private citizens have received a raise lately?" asked Raintree Heights resident Richard Swim. "I haven't."

Steve Batchfield of Westwood agreed.

"This tax is a great burden," Westwood said. "After retiring, I've had to go back to work. You should've been acting on this problem a long time ago. If the county had had more foresight, it (the lack of revenue) could have been taken care of.  I don't want to pay for other's drug or alcohol problems."

Henry County Commissioner Kim Cronk said understanding issues and needs must be balanced.

"We're all Henry County residents," Cronk said. "As representatives of all county entities, I want to say thank you for their services. We're at the end of our rope, laying off 65 employees in the last seven years. This meeting means the difference between funding or not funding our emergency services."

According to LaMar, now that the tax is approved, Henry County Auditor Pat French must, within 10 days, notify the Commissioner of the Indiana Department of Revenue, the Director of the State Budget Agency and the Commissioner of the Department of Local Government Finance (DLGF) that Henry County has made the decision.

The Public Safety LOIT will become effective Jan. 1, 2016.