County Income Tax May be Raised
January 27, 2005
Council Could Take Up $15 Million Plan Feb. 7
By John Strauss
Marion County residents could face a $15 million local tax increase this summer to help fix a county justice system that officials say is strained beyond the breaking point.
Proposals to ease jail crowding and add courts, prosecutors and public defenders have been floated before. But a proposal to increase the County Option Income Tax was shot down last year.
This year, the prospects for a tax increase look much different. On Wednesday, new City-County Council President Steve Talley said he supported an increase in the tax, known as COIT. Mayor Bart Peterson also said the increase might be necessary.
Councilwoman Jackie Nytes said she would introduce the measure, possibly at the next council meeting on Feb. 7. "We have spent down our fund balances -- our cash -- to nothing," she said. "Even though we were very careful in this last budget to reduce spending as much as possible and to defer as many things as we could, there's nothing like that left to do."
Peterson, Talley and Nytes are Democrats. Republican officials said the county badly needs new revenue but did not immediately endorse the plan.
The local income tax was started nearly 21 years ago at 0.2 percent. The current rate is 0.7 percent. If the rate were increased to 0.8 percent, as Nytes proposes, a person with a net annual income of $60,000 would see the tax increase to $480, up from $420. If the measure passes, it would take effect July 1.
Talley said he has talked this week with representatives from county justice agencies to see how the COIT funds might be divided, something he wants to know before any proposal is considered by the council.
To meet deadlines, a proposed increase would have to be introduced at the next council meeting. The deadline to file a proposal for that meeting is Friday. Talley said those deadlines were flexible; he could call a special meeting before the end of February and still meet deadlines for getting the increase approved.
But even with the support of Nytes, a budget expert on the council, and Talley, raising the tax is anything but certain.
"I think those of us who support that increase are just going to have to have our 'A' game in explaining this," Talley said.
Already this week, Nytes has convinced Councilman Greg Bowes, another Democrat.
"I don't like the idea of having to raise taxes, but we've got a lot coming at us," Bowes said. "We've got the police and fire pensions, juvenile court commitments, jail overcrowding."
Peterson opposed the increase last year, calling it premature.
Wednesday, he said it might be necessary.
"The single biggest problem facing our community is jail overcrowding, from a broken criminal justice system. It's hard for me to see how that can be funded adequately without an increase in COIT, but no final decisions have been made yet."
Phil Borst, Republican leader on the council, said he was opposed to the increase, partly because it "just doesn't come close to what our needs are."
By his calculation, local government needs an additional $137 million. Before any tax increase, he wants to see how much money could be found in cost savings. It makes no sense, he said, to fight for one tax increase and then have to go back to taxpayers to ask for another one later.
"Nobody wants to raise any kind of taxes. But if we're going to do something, we need to go to the well just once."
County Auditor Martha Womacks, a Republican, stopped short of endorsing the idea, though she lamented the county's looming list of outstanding bills. Local government, for instance, owes the state of Indiana about $70 million for juveniles who have been sent to the Department of Correction.
"We've exhausted every other resource that we have available to us, to be perfectly blunt," she said.
Womacks did not know how the new money might be divided but said, "It's probably going to be whoever screams the loudest, which might be the courts."
Making the case for the courts is Presiding Judge Cale Bradford, a Republican, who said Wednesday the county needs seven more criminal courts to help speed accused criminals through the system and ease jail crowding.
To staff those courts and hire more prosecutors, public defenders and sheriff's deputies would cost about $18 million a year, he said.
Bradford noted that Marion County courts handle 24 percent of all cases in the state, yet have 14 percent of the state's judges.
Following caseload standards set by the Indiana Supreme Court, the county should have 18 to 24 more judges, he said.
Bradford said adding judges would ease jail crowding because many of the cells are now occupied by defendants waiting to have their cases heard.
"It's like turning the tables over in a restaurant more quickly, to handle more customers," he said.
For now, the county jail is so crowded that most of those arrested for misdemeanors and minor felonies are released.
Bradford said that means those charged with minor crimes increasingly fail to appear for their court hearings, knowing that even if caught, there's little chance they'll be held long.
Judges reported 5,350 more failure-to-appear instances in 2004 than in the previous year, Bradford said.
"The word is out -- there are no repercussions," he said.
Such "minor" crimes are exactly the ones most likely to victimize ordinary people, the judge said.
"Most people think, 'murder -- that can't happen to somebody like me,' " he said.
"Well, we're all victims of theft and the petty stuff. And that's where this is hurting us."
County Option Income Tax
• Marion County's local income tax was begun in July 1984, at 0.2 percent.
• The tax was increased by 0.1 percentage point in each of the next five years, reaching 0.7 percent in 1989. It has not been increased since.
• State law caps the tax at 1 percent and limits yearly increases to 0.1 percentage point.
• The current 0.7 percent rate costs about $280 for a person with a net income of $40,000. That person would pay $40 more a year if the rate were increased to 0.8 percent, as proposed.
• For a person earning $50,000 annually, the tax would be $400, up from $350.