News
County Council discusses ‘rearranging’ LIT credits

By Emma Rausch

Wabash County homestead property owners may see an increase on their taxes this year.

The Wabash County Council may rearrange the Local Income Tax (LIT) credits upon advisement by Darren Bates, of DataPitStop.

At the council’s meeting Monday, Aug. 28, Bates reminded the council members that Wabash County has the second highest income taxes in the state, but it’s still “losing money,” or not bringing in as much as it could, because not all taxation options are being utilized.

“Last year, you had ($500,000) in cap losses,” he said, “This year you had basically $1 million. The way you’re going $1.4 million or $1.5 million next year if you don’t do anything. North Manchester, Wabash City, the bottom line is you’re getting so high that they’re all getting capped. So pretty much there is no growth of revenue for those units of government because they’re already capped out.

“Now the rest of the county, outside of the city limits, you as a county government are raising your 4 percent rate. Outside of the city, you’re able to generate more revenue. Inside of the city, you’re not generating more revenue. All you’re doing is increasing the cap losses of money you do not collect.”

Bates first presented the LIT information to the council in April, drawing specific attention to the circuit breaker program, which provides tax relief credits to homeowners.

While utilizing the program may seem like a positive decision, Bates advised the council Monday that in Wabash County, homeowners pay 3 percent of the tax.

“The bottom line is you have been heavy on homeowners (relief) credits for the last 10 years and … you’re having a problem now that you’re getting short of funds, you’re borrowing money, you’re out of funds,” Bates said. “So the only way (to fix that) without increasing property taxes, without increasing income taxes, how can we utilize the money you have better and not slam homeowners ... so rearranging (is the option).”

Bates recommended “half of the LIT going to shares to get (the council) back on track” with a 4 percent levy growth included.

In doing so, the council will not be raising the homestead tax rates, but instead taking away some of the tax relief credits, he explained, adding that homestead owners will see an increase on their taxes, but it is not a rate increase.

“The way for (the council) to increase the monies collected by $3.2 million is to recalculate the percentages we give tax credits to by using our income tax credits,” Scott Givens, Wabash County Commissioners chairman, said.

The council will have to decide by Oct. 31 if it will rearrange the tax credits.

In other news, the county government will begin budget meetings on Tuesday, Sept. 12, at 12:30 p.m. and continue through Sept. 14. The final adoption meeting will take place Sept. 25.
 

Posted on 2017 Sep 12