Indiana Daily Student

Bloomington City Council undecided on raising local income taxes

<p>Bloomington City Hall is seen on Feb. 14, 2022, on Morton Street. The Bloomington City Council showed mixed support for the proposed 0.855% increase on local income taxes during the meeting Wednesday night.</p>

Bloomington City Hall is seen on Feb. 14, 2022, on Morton Street. The Bloomington City Council showed mixed support for the proposed 0.855% increase on local income taxes during the meeting Wednesday night.

The Bloomington City Council indicated mixed feelings toward a proposed 0.855% increase in local income taxes during a meeting Wednesday. Council members expressed support for investment in public safety but were hesitant to increase financial strain on their constituents already dealing with a 40-year high inflation rate and other economic pressures.

The council will take a final vote on the increase next week. Three council members indicated they would support the proposal, and one council member suggested firm opposition. Three council members abstained.

Regardless of the council’s final vote, the Monroe County Local Income Tax Council makes all decisions regarding local income tax rates. The LIT Council is made up of representatives from county government as well as other localities in Monroe County, each of whom is given a different voting share based on population. 

Bloomington Mayor John Hamilton’s administration proposed the uptick in the local income tax rate. Hamilton gave a presentation at the meeting Wednesday, explaining the revenue generated would be spent across four categories: public safety, climate change preparedness and mitigation, equity and quality of life and essential city services. 

“Local income taxes are our only substantial local ability to determine our fiscal destiny,” Hamilton said.

Monroe County citizens currently pay a 1.345% local income tax rate. If the 0.855% increase is approved, the city would gain nearly $18 million in annual local income tax revenue, according to Hamilton’s presentation.

The revenue is necessary to fairly compensate essential city workers, Hamilton said. He referred to the departure of qualified local government employees to the private sector as a mass exodus, citing the lack of competitive pay as a major issue.

The largest portion of this money, approximately $6.5 million, would be dedicated to climate change preparedness and mitigation. This includes $4,845,000 which would be allocated to Bloomington transit investments, such as adding Sunday transportation services and increasing frequency of service to a maximum of 30 minutes between buses on weekdays. It would also aim to make Bloomington Transit more accessible by subsidizing ridership for low-income passengers and developing same-day transit programs for elderly individuals or individuals who are disabled who cannot use fixed-route transit. 

Councilmember Ron Smith, the only council member to definitively oppose the increase, said he saw the need for investment into public safety, but other aspects of the resolution seemed to place an unnecessary strain on citizens' finances. 

Councilmember Matt Flaherty said the proposed infrastructure may cost taxpayer dollars, but it creates a more equitable and sustainable quality of life, thus protecting citizens' finances in the long run.

“Not investing in transit also has an impact on people’s finances and quality of life,” Flaherty said. 

Flaherty said he understood the proposed package would cost Monroe County residents a lot of money, but he admires the Hamilton administration for addressing problems past administrations created by relying on short term solutions and failing to consider the consequences. 

“We’ve got a lot of deferred problems,” Flaherty said. “Things that we should have been spending money on all along, and we haven’t.”

Councilmember Susan Sandberg agreed taxes are necessary for a well-managed city. However, she cautioned against flashy projects and argued for a renewed focus on ensuring basic necessities. 

“I will struggle with this decision. I've lost sleep over it,” Sandberg said. “Especially as the list of projects continues to grow beyond my comfort level.”

Sandberg ultimately abstained from the vote and encouraged her constituents to reach out to her and express their thoughts. 

“Trust from the public is just paramount as we’re making this ask from the public,” Sandberg said.

Members of the public commented both in support and opposition of the proposed increase near the end of the meeting. 

Bloomington public safety officials, including Bloomington Fire Chief Jason Moore, expressed support for the resolution during public comment. They said new police and fire department headquarters are long overdue and necessary to recruit and retain qualified law enforcement.

“The conditions your firefighters live in are close to deplorable and that is being kind,” Moore said. “We’ve done a lot to do well with what we have, but it’s not enough.”

The Greater Bloomington Chamber of Commerce was opposed to the legislation, citing results of a survey it conducted including 196 community members. More than 90% of participants expressed disapproval of the increase in local income taxes. The survey participants also overwhelmingly ranked public safety as their number one investment priority. 

“We ask that you take some more time to identify a solution to public safety funding challenges that is not dependent on an exorbitant tax increase,” Spoonmore said.

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