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After weeks of complaints statewide about higher property tax bills, some local counties are considering the adoption of an additional income tax to ease the future effect of property tax increases.
On Monday morning, a group of Huntington County Realtors asked the Huntington County commissioners to back its request for a local county option income tax increase when it takes it to the County Council in late September, the earliest the tax could get on the agenda.
LaGrange County Council members postponed a discussion on the income tax option Monday because of the extension granted by Gov. Mitch Daniels, giving counties until Oct. 1 to decide, Auditor Jackie Boyle said. Council members also wanted to have their financial consultant on hand for the discussion, she said. The council will discuss it Sept. 5.
In Huntington County, in a letter written to the commissioners from the Huntington Area Board of Realtors’ property task force committee, the Realtors requested a 1 percent county income tax to be credited dollar for dollar against property taxes.
While a presentation on a county option income tax is scheduled for the Huntington County Council meeting on Sept. 24, the group came looking for the commissioners’ support, even though the commissioners make no decisions about the adoption of an income tax.
For the most part, the three commissioners expressed their shared frustration over the property tax situation. Huntington County saw one of the highest property tax increases at 15 percent to 25 percent.
Commissioner Steve Updike expressed concern that state legislators seemed to say that the county needed to take care of the property tax problem when some county officials had been hoping the state would do something about it.
And Commissioner Jerry Helvie urged residents not to point the finger for higher taxes at Huntington County government but rather a more bloated system at the state level.
Kittie Keiffer, one of the Realtors in attendance, said area property owners were seeing increases in their tax bills, which were, in turn, driving up the costs of their house payments.
Although an increase in the income tax may not dramatically reduce the property tax effect, some would help, County Auditor Don Schoeff said.
“I think it’s something that needs to be done,” he said, adding that it is hard to get elected officials to say they’re in favor of a tax increase though they may see such increases are needed.
Because of the few weeks between now and the presentation to the council, the commissioners said they wanted to take time to gather public feedback.
The County Council has not had much discussion about an option income tax increase as it waits for the September presentation, council President Kathy Branham said.
“We’re at a place where we need a lot more information before we make a decision,” she said. “This is too important to make a knee-jerk reaction decision.”
According to a recent Purdue University study, if Huntington County, with an average homestead assessed value of $113,685, were to enact a 1 percent increase in the county option income tax, the property tax bill for the average home would go from $890 to $391 if the increase were applied solely to the homestead tax.
In LaGrange County, with an average homestead assessed value of $175,547, the county option income tax increase would drop that property tax bill from $965 to $455, according to the study.
rgreen@jg.net
