In what many called the most difficult decision of their time on the Bloomington City Council, members voted 4-5 Wednesday night against a 0.25% income tax increase for economic development.
The Monroe County Local Income Tax Council is the body that decides changes in local income taxes, and it consists of the Bloomington City Council, Monroe County Council, the Ellettsville Town Council and the Stinesville Town Council. Bloomington council members’ votes have the most weight because Bloomington accounts for almost 60% of the county’s population.
Because the Bloomington council rejected the tax ordinance, which was a proposal for the rest of the Monroe County Local Income Tax Council to consider it, no other bodies of the tax council will be able to vote on the tax.
The economic development tax for Monroe County would have brought the total local income tax rate to 1.595%, and would have generated more than $8 million annually, city spokesperson Yaël Ksander told the Indiana Daily Student on Wednesday. About $4 million would've gone to Bloomington, $4 million to Monroe County and $200,000 to Ellettsville.
The tax is meant to be the third stage of Mayor John Hamilton’s Recover Forward plan to recover from the COVID-19 pandemic.
“If we want seriously to recover forward, we have to have resources to do so,” Hamilton said.
But there was no line-item plan for what those resources would’ve been, though the mayor gave a list of some concerns the tax money could help address. These included job insecurity and scarcity, food insecurity, public transportation, the high cost of living, support for the arts community and carbon footprint reduction.
Earlier in the night the council had approved an advisory commission to help the city decide how to use the tax revenue, but its vote against the tax ordinance made the commission’s approval moot, council member Matt Flaherty said. In its reconsideration vote, the council unanimously rejected the creation of the advisory commission.
Erin Predmore, president and CEO of the Greater Bloomington Chamber of Commerce, said during the public comment period that she and the chamber were against the tax. She cited a lack of public engagement, lack of a solid plan to use the funds from the tax and lack of collaboration with the other bodies of the Monroe County Local Income Tax Council.
Some community members took issue with the tax being a flat tax, so all county residents would have paid the same amount regardless of their income.
Community member Randy Paul said he disagreed with the mayor’s statement during his presentation that the tax would help poor people.
“I think it's one thing to talk about poverty,” Paul said. “It is far different to have gone through that experience.”
Paul said his family went from living on a six-figure salary to almost nothing because of health problems. He recounted a memory of taking his daughter to the doctor, but the doctor wouldn’t see her because the family had a past-due balance of $35.
“And so when I hear someone say $25 or $35 isn't a big deal, it's a huge deal if you don't have it,” Paul said.
CORRECTION: A previous version of this article misstated the Bloomington City Council’s voted against the tax ordinance, which ordinance the council made a reconsideration vote on, and the tax council’s involvement after the Bloomington council rejected the tax. The IDS regrets these errors.
