2001 Comprehensive Annual Financial Report

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Economic Development Income Tax EDIT -This tax was fi } rst enacted as of July 1,1995 at the rate of one tenth of one ercent 0.1 % of Ci p ~ } ty residents hand some nonresidents } adjusted gross Income, which generated $1382 670 an $1466 D2 d , 9 for the City of South Bend in 1996 and 1997, res ectivel .The ' p y C1ty s Common Council and the St. Joseph Coun Council assed res ' tY p pect~ve ordinances that increased the rate to two tenths of one ercent 0.2° ' p ~ /°), which effectively doubled the City's distribution be 'nnin in 1998. The ' ~ g City received $2,871,297, $3,156,441, $3,105,473, and $3,417 7~3 of EDIT distri ' buttons in 1998,1999, 2000, and 2001 respectively, and is antici atin the recei t of .. p g p $5.5 million from this tax in 2002. Both of the local o tion income taxes DIT P ~E and CaIT} are collected and administered by the Indiana D artYnent of Stat . ~ e Revenue. The EDIT distribution is then remitted to the coon which then tY~ allocates these tax receipts between the county and the cities and towns in the county bayed on the proportionate amounts of property tax levy for each unit. The City's portion of the total county's EDIT ranged from 35.G% to 38.2% over the last four years as the proportionate property tax levies have char ed. The EDIT . g rate will remain at the current level X0.2%} unless further action is taken b the . Y respective councils. The EDIT rate can legally be raised to four tenths of one percent X0.4%}, County option Income Tax ~CCIT} -The City and County Councils enacted this tax effective July 1,1997 at a rate of two tenths of one percent X0.2%} with an increase of one tenth of one percent X0.1 %}per year during the next four years. This would take the rate to its legal limit of six tenths of one percent X0.6%} by the year 2002. The City would not have supported the new County Option Income Tax if it had not been accompanied by a tandem ordinance, which established an additional 6% homestead credit for property taxpayers. This additional homestead credit increased to 7% in 1999 and to 8% in 2000 where it will remain at this level}. Thus, as a result of the passage of this new tax, City property taxpayers were provided relief through a reduction in their property tax bills while the City was provided with an additional source of revenue that will eventually slow the growth of future property tax rate increases. Although the rate was in effect in mid-1997, the City received its first CDIT distribution of $740,235 in 1998. The receipts increased from $1,717,303 in 1999 to $2,378,487 in 2000 and $4,491,922 in 2D01. The City is anticipating the receipt of $9.5 million from this tax in 2002 and $6.9 million in 2003 as a result of the scheduled xx