The Bloomington City Council postponed a vote to raise the local income tax Wednesday because a council member was absent. The vote is now expected to take place May 4.
The proposed increase would raise income taxes by 0.855% from the current Monroe County local income tax rate of 1.345%. The revenue generated from the increase would go toward improvements in four categories — public safety, climate change preparedness and mitigation, equity and quality of life changes and essential city services, according to the meeting legislative packet.
Mayor John Hamilton endorsed the tax increase, saying it would allow the local government to account for unexpected costs.
“It was designed to create a stable, ongoing, viable source of revenue for ongoing expenses,” Hamilton said. “It’s important to preserve flexibility for unforeseen activities, unforeseen needs and downturns in the economy.”
Council members asked about using public safety reserve funds rather than increasing taxes and how that funding is currently being used. One major concern was whether increased tax revenue was needed for police and firefighter staffing and salaries. Bloomington Police Chief Mike Diekhoff said that the department was currently understaffed and that increased salaries and incentive packages, made possible by increased tax revenue, would make the position more competitive.
Members of the public said tax increases will disproportionately affect low-income households, underrepresented individuals and graduate students. Many said they approved of the proposed initiatives, but they opposed increasing taxes, particularly due to inflation.
The largest chunk of revenue coming from taxes, approximately $6.345 million, would be dedicated to climate change investments. These would include enhancements to Bloomington Transit and other public transit systems as well as direct investments in the Bloomington Climate Action Plan, which recommends strategies to reduce greenhouse gas emissions.
Around $4.5 million of the new revenue would go toward public safety, including police personnel costs, investments in public safety reforms such as 911 response alternatives and essential building upgrades. Nearly $3.65 million would go toward quality of life improvements, such as housing affordability and job training for residents.
The final category, essential city services, would receive $2.5 million and include maintaining aging physical faculties, covering major expense increases and improving IT infrastructure.
Three council members publicly supported the increase, citing the importance of supporting public transit and the Climate Action Plan. Councilmember Steve Volan pointed out the importance of investing in public transportation.
“It costs more to run a city at the quality of life we have now,” Volan said.
While the timing of this tax increase was criticized, Volan said the Federal Transit Administration would currently help support investment in Bloomington Transit. Volan said the council needs to take advantage of this policy while the current U.S. president is in office.
Councilmember Dave Rollo criticized the timing of the proposed tax increase. Inflation and food prices are up, he said, and the council needs to look at other sources of funding besides local income tax increases.
“People are feeling squeezed and having to tighten their belts,” Rollo said. “I think it’s incumbent upon us to tighten our belts, too.”