COIT Funds to Help Speedway Public Safety


(posted Aug 2)


Speedway could receive a potential $2 million increase for public safety with the city county council's passage of the county income tax increase to 65 hundredths of a percent. The council was acting on H.B. 1478 that permitted local governments to adopt an income tax to offset property taxes.

The city-county council action did two things. It approved raising the county option income tax by two tenths of a percent from October 1, 2007 to September 30, 2008 and to three tenths of a percent from October 1, 2008 to September 30, 2009. It also created a county stabilization fund for the excess revenues.

The city county council then imposed an additional income tax of 45 hundredths of a percent from October 1, 2007 to September 30, 2008 to fulfill Mayor Peterson's goal to fund public safety with $90 million. From October 1, 2008 to September 30, 2009, the rate will be thirty five hundredths of one percent for public safety. The total amount of both passages equates to .65 percent even though public safety lowers in 2008 to .35, the other income tax imposed raises from .2 percent to .3 percent.

Speedway should receive $177,000 in income tax instead of the same amount in property taxes to cover the general fund, police and fire pension and parks and recreation.

"It is the same revenue. It is changed from property taxes to income tax," said Tom Guevara
of Crowe Chizek.

The city county council's action does not become official until the Marion County Income Tax Council adopts the ordinance. The council is comprised of Indianapolis, Southport, Beech Grove, Speedway and  Lawrence. The votes are based on population with Indianapolis having the ability to cast 92.04 votes while Speedway voting is 1.5 votes. Beech Grove can cast 1.73 votes, Lawrence can cast 4.52 votes while Southport voting power is .22 votes.

Council President Bill Golay still wanted Speedway's voice to represented even though the town voting rights could not supersede any action over Indianapolis.

Guevara said the council would need to develop a resolution that mirrors the city's to be able to cast the vote.

Guevara expected the town's distributions to be down since the Governor Mitch Daniels ordered a tax reassessment. He said the reassessment is considered an appeal of taxes. During the appeal process, the taxpayer pays the amount of the prior year. This means property tax payers will be paying the 2006 amount. Guevara said he doesn't expect the situation to improve over the next 3 or 4years because the General Assembly will have to tinker with the system in addition to businesses filing appeals because the 2007 reassessment is supposed to capture businesses that were under assessed.

Golay was concerned with the shortfall in taxes that the general fund would not be able pay the million plus dollars borrowed from sewer and water by December. The town borrows money from the utilities to avoid taking out emergency loans when tax distributions are late. Golay inquired about setting up the paper work to borrow money from the Indiana Bond Bank just case the distributions are late so they can pay the back the utilities as required by law.

Town Manager John McCurtain said the town really needs to stop borrowing from the sewer fund because sewer plant has to forgo investments since all of the sewer money is tied up funding payroll, debt services and other funds for town services.

Golay also suggested striking an inter local agreement with the Capital Improvements Board to receive part of the innkeepers' tax. Currently the money goes to the Capital Improvements Board to fulfill the downtown building of the Lucas Oil Stadium. Golay wanted access to some of the distributions to help pay for the redevelopment in Speedway. He thought the council would have a better chance to develop an inter local agreement with CIB than the General Assembly passing legislation to capture part of the tax.

The property tax crisis has had a trickle down effect. Park Board President Tim Ramion said the $1.995 million bond issue might be placed on hold by Department of Local Government Finance. The DLGF gives the final approval before local governments can issue bonds. At some point the board will have to stop the consultants' work to prevent incurring additional expenses. Ramion said they were hoping to have the bond in place. The expected goal was to be able to buy playground equipment at the National Recreation and Parks Association trade show that is going to be in Indianapolis this year. It would save the park board additional money in shipping if they could buy at the show.

Park Board member Lisa Edington said some of the equipment is beyond repair and described it as "scary" to see kids playing on the equipment.

Guevara said Daniel's administration thinks local government is the cause of the property tax crisis. He also said there has been a change in administration in the DLGF that could slow the approval process. Guevara noted as a last result the town could buy the equipment and then parks board can pay the town back with the bond proceeds.

Ramion also requested the water department pay for the $8,000 fencing repairs since the land is deeded the water department. He noted the budgetary procedures do not consider the fence to be part of park equipment so they are lacking funds to pay it.

Town Clerk Sharon Zishka said she has heard that it has been deeded to the water company, but has never seen the actual papers. She said the assessor's office would know what government entity the property is deeded to. According to Indy Site Finder, parcel number 9041580 , which includes town hall and the north half of Leonard Park, is owned by the Speedway Water department.