Proposing and voting in favor of a ordinance of the St. Joseph County Income Tax County Income Tax Council Imposing a Public Safety Local Option Income Tax

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CITY OF SOUTFI BEND STEPHEN J. LUECKE, MAYOR OFFICE OF THE MAYOR November 25, 2008 Mr. Timothy A. Rouse President, South Bend Common Council 4`h Floor, County-City Building South Bend, IN 46601 Re: Resolutions Approving County Tax Council Ordinances for Local Option Income Tax (LOIT)-Public Safety and Property Tax Relief Dear President Rouse: In 2009 and 2010 our City faces a severe revenue shortfall due to the effect of the property tax caps under House Enrolled Act (HEA) 1001. Throughout the 2009 City budget deliberations, the Common Council has learned how devastating the impact will be on City services if the budget shortfalls projected under HEA 1001 take place. In order to prevent large scale reductions in City services, including police and fire protection, I am filing with the Common Council two Resolutions casting South Bend's 40.59 votes as a member of the County Income Tax Board for two local option income taxes at a combined rate of 1.25%. These taxes will provide relief for schools, parks and libraries, as well as for city and county government. The two LOIT taxes sought to be adopted consist of a public safety tax of .25% and a property tax relief tax of 1 %. By statute, the revenue derived from the public safety LOIT must be deposited into a separate fund and must be appropriated "only for public safety purposes." (Ind. Code §6-3.5=6-31(f)). Because the largest component of the City budget is for public safety, adoption of this LOIT will prevent drastic reductions in the public safety segment of the City budget. The property tax relief LOIT will be used to provide local property tax credits at a uniform rate to all taxpayers in the County. It is estimated that county-wide this will result in credits for property owners in significant aggregate sums. For example, it is prof ected that homeowners county- wide would receive a total of over $23 million in property tax relief credits. COUNTY-CITY BUILDING • 227 W. JEFFERSON BOULEVARD • SOUTH BEND, INDIANA 46GO1 PHONE 574/235-9261 • Fax 574/235-9892 • TDD 574/235-5567