2016 Continuing Disclosure - City of South Bend

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(Cont'd) (d) In April 2012, the Budget Agency announced that the State had uncovered approximately $206 million in underpayments to local units of government based upon new information from DOR regarding local option income tax collections for 2009 and 2010. The new information provided to the State Budget Agency materially affected the certified distributions for 2011 and 2012 and the State Budget Agency recertified the distributions for those years. The Indiana General Assembly enacted legislation requiring distributions to be reduced to replenish the shortfall. The State Budget Agency indicated that, effective with certified income tax distributions for 2012, the income tax distributions would generally be frozen at the 2011 certified amounts for the coming years as long as the county's income tax trust balance ("County Trust Balance") was negative. In 2016, the General Assembly enacted legislation providing for a supplemental distribution of local income taxes when the balance in a county's local income tax trust account exceeds 15% (rather than 50%, under prior law) of the certified distributions to be made to the county. The County Trust Balance represents the income taxes held by the State, which are to be distributed to all applicable units (cities, towns, townships, libraries and county units) in the County. The Trust Balance History Report published by the State Budget Agency in September 2016 indicates that the actual COIT balance for all taxing units in St. Joseph County at the end of 2014 was $11,833,819. The estimated balance for 2015 (as of September 2016) is $17,236,438. 19 CITY OF SOUTH BEND FOOTNOTES