Bloomington city council declines mayor’s request for tax increase on 4-5 vote, proposal now dead

On Monday Wednesday night, Bloomington’s city council voted 4–5 on a request from mayor John Hamilton for a quarter-point increase to the countywide local income tax. That kills the proposal and it will not be considered by other governing bodies in Monroe County.

A press release from Bloomington mayor John Hamilton, issued 15 minutes before midnight on Wednesday and shortly after the city council’s meeting concluded, announced the news.

The headline of the press release leaves the defeat of the proposal to the calculation of readers: “City Council Renders Four Votes for 0.25% Local Income Tax Increase.”

The press release confirmed that the proposed ordinance considered by Bloomington’s city council will not be forwarded for consideration to the other members of Monroe County’s income tax council, which includes the county council and the two town councils. [IC-6-3.6-3-8]

The four votes in favor of the tax increase came from Dave Rollo, Matt Flaherty, Kate Rosenbarger and Steve Volan.

Voting against the proposal were Ron Smith, Isabel Piedmont-Smith, Susan Sandberg, Sue Sgambelluri, and Jim Sims.

The press release quotes Hamilton saying, “I am disappointed that a majority of our city council did not affirm the need for government to step up in this time of multiple crises to take care of our residents, and protect and advance the community for subsequent generations with additional revenue.”

The extra 0.25 points of local income tax would have brought the total rate paid by Monroe County residents to 1.5950 percent. The higher rate would have generated around $4 million for the city of Bloomington and around $4 million for Monroe County government and the two towns of Ellettsville and Stinesville.

The arithmetic on 0.25 points of additional income tax for someone with a taxable income of $30,000 would translate to an extra $75 a year. Continue reading “Bloomington city council declines mayor’s request for tax increase on 4-5 vote, proposal now dead”

No increase to local income tax for Monroe County at this time: Bloomington’s city council votes 4–5

At Wednesday night’s meeting of the Bloomington city council, the voting tally on the proposal to enact a quarter point increase to Monroe County’s income tax was 4–5.

Voting yes were Dave Rollo, Matt Flaherty, Kate Rosenbarger and Steve Volan.

Voting no were Ron Smith, Isabel Piedmont-Smith, Susan Sandberg, Sue Sgambelluri, and Jim Sims.

Based on the wording of the state statute, the proposal looks like it is dead and does not need to be forwarded to the other members of the tax council—the Monroe County council, the Ellettsville town council and the Stinesville town council.

That’s because Bloomington’s city council action on Wednesday was a resolution to propose an ordinance to the rest of the tax council.

The statute says, “To [present an ordinance to other members of the tax council for passage], the member must adopt a resolution to propose the ordinance to the local income tax council and distribute a copy of the proposed ordinance to the county auditor.” [IC-6-3.6-3-8]

Given that the vote on the resolution was 4–5, the Bloomington city council did not adopt a resolution proposing an ordinance to the other members of the council.

A question asked by The Square Beacon at the meeting  during public commentary, to confirm that the other tax council members will not need to vote on the proposal, did not get a response.

Shortly after the meeting ended, a press release issued by the mayor’s office confirmed: “The ordinance will not be forwarded for consideration by the other members of the Monroe County Income Tax Council.”

The Square Beacon hopes to be able to report in more detail on the deliberations in a separate article. Continue reading “No increase to local income tax for Monroe County at this time: Bloomington’s city council votes 4–5”

Income tax estimates from state for Monroe County, Bloomington 2021 budgets: Up 9.3 percent compared to last year

Tuesday’s news from Indiana’s state budget agency (SBA) can be analyzed by local governments in Monroe County  as at least OK.

The SBA’s estimated distribution of local income tax revenue to Monroe County governments is about 9.3 percent higher for 2021 than it was for 2020.

That’s not a complete surprise. A big impact from the COVID-19 pandemic on income tax revenues to Indiana local governments is not expected to be felt until 2022. That’s when distributions of local income taxes (LITs) will be based on the tax collected on income earned in the pandemic year of 2020.

Still, in late summer this year, local governments were drawing up initial budgets for 2021 with some caution baked in. Even though the 2021 LIT distributions are based on taxes collected on income earned in 2019, there was some concern that the ability of wage earners to pay those taxes this year might have been be affected by the COVID-19 pandemic. That concern looks like it has been somewhat relieved by Tuesday’s estimates from the SBA.

But based on the SBA estimates, the increased amount of revenues that Bloomington can likely factor into its 2021 plans will not be enough to tip the balance from a deficit budget to one where revenues exceed expenses.

Responding to a query from The Square Beacon, city communications director Yael Ksander said that “[T]he allocation for the City would still not equal the amount of deficit spending the 2021 budget proposes.”

Planned expenditures won’t be affected by Tuesday’s SBA estimates, Ksander said. “The 2021 expenditure budget will not be revised in light of these new estimates. This additional revenue would simply diminish the level of deficit spending.” Less deficit spending means the city will won’t have to tap as much in reserves as it had planned. Continue reading “Income tax estimates from state for Monroe County, Bloomington 2021 budgets: Up 9.3 percent compared to last year”

New Bloomington commission floated, would oversee funds from higher local income tax rate

On Wednesday night at a special meeting, Bloomington’s city council started its deliberations on a proposal to increase the countywide local income tax by a quarter point. The debate will continue on Sept. 16.

A new seven-member Sustainable Development Fund Advisory Commission (SDFAC) could be created by the Bloomington city council that would control spending of about $4 million in funds that would be generated by the extra quarter point added to the rate through an increase the council is considering.

That amount would take the rate from 1.345 percent to 1.595 percent. The higher rate would generate about $4 million annually for Bloomington. A little more than $4 million would be generated each year for Monroe County government and the town of Ellettsville.

A public hearing and a vote is scheduled for Sept. 16.

Under a proposed ordinance released to the public a few hours before the city council’s special meeting, a new city commission would have some control over expenditures from the extra revenue.

Under the ordinance, a new non-reverting fund would be created, called the Sustainable Development Fund.

Future ordinances and resolutions requiring expenditures from the fund would be subject to approval of a new seven-member commission, called the Sustainable Development Fund Advisory Commission (SDFAC).

Under the new ordinance, without a majority recommendation from the seven-member commission, the city council could not adopt an ordinance requiring an expenditure from the new fund.

Membership on the new commission would consist of: the mayor, three councilmembers and three citizens. That means an ordinance requiring expenditures from the new fund could be blocked by a coalition consisting of a single councilmember and three citizens.

The ordinance creating the new commission got a first reading on Wednesday, but no discussion, because under local code no debate or amendments are allowed at a first reading.  It will be considered at a second reading on Sept. 16.

Wednesday marked the first public deliberations by the city council on the possible income tax increase. A city council work session held last Friday was limited to asking questions of the administration.

On Wednesday, four councilmembers indicated some level of support. The other five can be analyzed as undecided. Continue reading “New Bloomington commission floated, would oversee funds from higher local income tax rate”

Monroe County to Bloomington: “We respectfully write to implore you to postpone any vote on the tax increase.”

Responding to a proposal to increase Monroe County’s local income tax by a quarter point, from 1.345 percent to 1.595 percent, the county council voted unanimously on Tuesday to approve a letter to the Bloomington city council that questions the timing of the move.

The county council’s letter asks Bloomington’s legislative branch “to devote substantially more time to collaborating with the mayor and the full local income tax council membership to most effectively plan and consider this proposed income tax rate increase.”

The city council has scheduled its vote on the proposal for Sept. 16, after an initial city council discussion that is set for Sept. 9. The county council wanted city councilmembers to receive the letter in time for their Sept. 9 deliberations.

The city council is responding to a request by Bloomington mayor John Hamilton to consider increasing the income tax by a quarter point, after proposing a half-point increase on New Year’s Day.

The impact of the COVID-19 pandemic is a reason given by Hamilton for reducing the amount of the increase. Hamilton has also refocussed the intended expenditures for the additional revenue to eliminate additional funding for public transit, among other changes.

The impact of the COVID-19 pandemic is one reason that the county council’s letter gives for not considering a tax increase of any amount at this time: “Monroe County residents are experiencing a global pandemic with no end in sight. The negative impacts of COVID-19 are real and continue to weigh heavily on all residents in recent weeks and months.”

The letter continues, “Some of Monroe County’s largest employers have announced plans for personnel furloughs, and wage cuts due to the ongoing COVID-19 crisis. In addition, many small local businesses have had to make the difficult choice to close permanently, or lay off staff indefinitely, causing a loss of income to a significant number of Monroe County residents and families.”

The letter wraps up the point about the COVID-19 impact by saying, “During such uncertain times, when evidence of stress and depression are all around us, and hitting us too close to home, it would be unwise to add to the stress our residents face by increasing their tax burden without a manifest and widely supported plan for its use.”

A city council vote on Sept. 16 could enact the tax increase on all Monroe County residents, if it achieves either a 9–0 or 8–1 majority. That’s based on the voting weights assigned to individual representative to members of the tax council. Continue reading “Monroe County to Bloomington: “We respectfully write to implore you to postpone any vote on the tax increase.””

Mayor’s Friday release of income tax details makes for Labor Day weekend of study for Bloomington city councilmembers

Late Friday, after a noon work session, Bloomington city council members received some additional details from the city administration about a proposed increase to the local income tax (LIT). They’ll start considering it at a special meeting on Wednesday, Sept. 9 and could take a vote as soon as Sept. 16.

Bloomington’s mayor, John Hamilton, has modified the rate and the focus of the local income tax that he pitched on New Year’s Day. It’s now proposed to be a 0.25-point increase instead of 0.5 points.

And instead of focusing just on sustainability initiatives like transit, affordable housing, energy, and local food—which Hamilton described in his State of the City address—it now includes a range of other projects.

Among the additional programs that Hamilton wants to fund with the extra LIT revenue are social services, jobs programs, bicycle-pedestrian infrastructure, curbside composting, health care, and parks capital development projects.

No longer a part of the mix is funding for public transit. Funding for the public bus system had been been a major part of the original proposal, about half of it. For many, it was a compelling reason to support an increased tax.

Several elements in the LIT draft spending plan release on Friday turn out to be continuations of initiatives that are included in the recently proposed 2021 budget, or programs that won the council’s approval in early August as part of a roughly $2 million appropriation ordinance. Continue reading “Mayor’s Friday release of income tax details makes for Labor Day weekend of study for Bloomington city councilmembers”

Council sets special meeting for Sept. 9, looks to vote on local income tax increase a week later

At Bloomington city council’s regular Wednesday meeting, president Steve Volan called a special meeting for next week, on Sept. 9, to consider a quarter-point increase to the local income tax across Monroe County.

The special meeting was scheduled at the request of Bloomington mayor John Hamilton, who wants the council to vote by Sept. 16.

Depending on the form of the legislation that’s put in front of the city council on Sept. 9, the nine-member group could vote the same night to impose the quarter-point income tax increase.

The intent appears to be: Wait until Sept. 16 for a vote on enactment of the tax. But if the proposal is introduced on Sept. 9 as a resolution, instead of an ordinance, a vote could be taken that same day, without any exceptional action by the council. [Added at 1:45 p.m. Sept 3, 2020: According to city council attorney, Stephen Lucas, the public hearing associated with the vote has to be noticed 10 days in advance. So the vote could not be taken, unless public notice of a hearing were given 10 days earlier.]

An increase of 0.25 points would generate around $8 million annually across the county, of which about $4 million would go to Bloomington.

What would the tax pay for?

Dating back a couple of years, one push for increasing the county income tax has come from advocates looking to expand public transit. When Hamilton suggested a 0.5-point local income tax increase on New Year’s Day this year, funding for public transit was a prominent part of the mix. Hamilton’s State of the City address in late February sketched out the possibility of increasing Bloomington Transit’s budget by 40 percent.

Increasing BT’s budget by 40-percent works out in round numbers to the better part of $4 million, or about half of the amount that the 0.5-point increase would have generated.

Public transportation no longer appears to a significant part of the mix for the 0.25-point proposal, an adjustment that came from the mayor in mid-July.

During public commentary at Wednesday’s meeting, pedestrian and public transit advocate Greg Alexander asked that the revenue from increased local income tax revenues be put towards public transit and sidewalks.

Alexander told the council to “make clear that you’re focusing the new income tax on transportation, specifically on the bus system—and gosh wouldn’t be nice if it was a little bit for sidewalks, too.” Alexander added, “Because transportation is a key, uncontroversial function of government.”

Alexander wrapped up by saying, “I just urge you to make it really clear what you want to spend the money on. And please spend the money on bike, pedestrian, bus—especially bus transport.” Continue reading “Council sets special meeting for Sept. 9, looks to vote on local income tax increase a week later”

Analysis | From transit, to climate, to basic services: A changing trajectory for Bloomington’s income tax proposal

An op-ed written by Bloomington’s mayor, Democrat John Hamilton, published Friday morning in The Herald-Times, tries to make a case for Bloomington’s city council to enact a quarter-point increase to the local income tax.

The Friday morning op-ed by the mayor resurfaced the idea of a quarter-point local income tax increase, after a six-week period of public silence on the part of city councilmembers.

That six weeks is measured from July 16, when Hamilton re-introduced the topic of a local income tax increase, after first announcing the idea on New Year’s Day—as a half-point increase.

Even if the headline to Hamilton’s op-ed reads, “We all have a decision to make,” it’s elected representatives, like city councilmembers, who will take the deciding votes.

Adding a quarter point (0.25) to the local income tax rate would generate about $4 million for Bloomington and a little more than $4 million for Monroe County and Ellettsville governments.

Possible timing for the city council’s action would include a first reading at a special meeting on Sept. 9. That could be followed a week later by a second reading and final vote on Sept. 16.

Hamilton’s op-ed attempts an argument for quick city council action  by raising the specter of possible future moves by Indiana’s Republican-dominated General Assembly: “The state legislature may well reduce or eliminate our ability to accomplish new revenues by next spring (they already changed the voting requirements earlier this year).”

For Hamilton, the preservation of essential government functions is an important reason for the tax rate increase. That’s based on the final sentence of his op-ed: “This prudent, proposed investment is needed to meet the daunting challenges that we face in common, and to sustain the basic services on which we all depend.”

The timing issue, when combined with one stated purposes for the tax increase, makes for a pitch that goes something like this: The city council needs to act now, in case the state legislature takes away Bloomington’s ability to pay for basic services.

Two separate issues stand out as dubious in connection with that pitch. One is the question of urgency. The other is the question of purpose. Continue reading “Analysis | From transit, to climate, to basic services: A changing trajectory for Bloomington’s income tax proposal”

Bloomington’s public transit looks to COVID-19 recovery in 2021

On Wednesday night, Bloomington Transit general manager Lew May presented his 22nd annual budget to Bloomington’s city council.

It was a part of the four-day series of 2021 budget presentations heard by the council this week. The council won’t see a final version of the budget until late September and won’t take a vote on it until October.

A highlight of BT’s 2021 budget is the way it maintains a course set in 2020, for the acquisition of electric buses. Three more are budgeted for next year. They show up in the capital expenditure breakdown of the $14.5 million total budget.

The planned 2021 capital expenditures are $5.2 million, which is about 8 percent more than last year’s $4.8 million. Compared to 2019, the 2020 capital expense figure was nearly double. Continue reading “Bloomington’s public transit looks to COVID-19 recovery in 2021”

Bloomington mayor renews call for local income tax increase, reduces ask from 0.5 percentage points to 0.25; says 2021 budget for sworn police officers will decrease

Bloomington’s mayor John Hamilton has renewed his call, made at the start of the year, for the Bloomington city council to increase the local income tax.

cropped Hamilton Screen Shot 2020-07-16 at 3.51.31 PM
Screen shot of Bloomington mayor John Hamilton’s July 16, 2020 Facebook video. (Image links to video.)

Such a tax would apply to all residents of Monroe County.

The additional revenue from the income tax would still go towards climate action and sustainability initiatives. But the 0.25-percentage-point increase suggested by Hamilton on Thursday is half the 0.5-point increase that Hamilton had proposed on New Year’s Day.

Another highlight from Thursday’s message from the mayor, which could be overshadowed by reaction to the income tax proposal, is an indication that recent calls to “defund the police” have resonated with the mayor at least a certain degree.

From the mayor’s Thursday speech: “Our budget for 2021 will propose significant changes in the police department, including reductions in funding of badged officer positions and increases in non-badged positions…” Continue reading “Bloomington mayor renews call for local income tax increase, reduces ask from 0.5 percentage points to 0.25; says 2021 budget for sworn police officers will decrease”