12-11-08 Common Council Minutes - Laserfiche WebLink

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SPECIAL MEETING DECEMBER 11, 2008 the State of Indiana have a higher rate than St. Joseph County. All four counties that border St. Joe County, Starke, Marshall, LaPorte and Elkhart have a higher local tax rate. He stated that the government exists to service the citizens, not everybody will demand the same level, but that service must be provided that is demanded. A LOIT of .05% and a Public Safety LOIT of .25% will raise approximately in St. Joseph County, 35 million dollars. Of the 35 million dollars, 23 million dollars of it will be applied to property tax relief. Mr. Mullen stated that 66% of the raised revenue through the LOIT will go to property tax relief. This is good, what a great benefit to the retired elderly who have no income. They won’t pay a LOIT but they will get the property tax relief because of LOIT. This year has been a long and difficult year for everybody in government. It maybe even more difficult in 2009 and very, very difficult in 2010. Mr. Marty Wolfson, 809 Park Avenue, South Bend, Indiana, stated that he is speaking as an individual and not representing any organization. He stated that he heard the Mayor of South Bend state that without further sources of revenue, the City will have to cut back needed public services. He has every right to be concerned about having to cut back on public safety services and need to look at a local option income tax as the only source of additional revenue available. However, there are remonstrators here tonight who will say that now is not a good time to be raising taxes on people who are already struggling to make ends meet. They will say that we are in the midst of a potentially very severe recession and people are losing their homes and their jobs. He stated that he thinks those people are absolutely right as well. He stated that he has four reasons for being in favor of a local option income tax. First, cutting back on police & fire protection, libraries and parks and other needed services dramatically undermines the quality of life and makes everyone poorer. Second, making these cuts makes a loss of jobs, and is certainly not what is needed during a recession. Third, the local option income tax is the only source of revenue available to prevent these cuts. Fourth, there remains the possibility that other sources of revenue like a hotel/motel tax or an event ticket tax might be allowed by the State Legislature next year, in which case there might be a possibility of rolling back some of these income taxes. He stated that this is not an easy decision and respects the people on both side of this issue. He stated that why are we fighting against each other over two bad options, the answer is that he thinks we all realize is that we have been put into this box by our Governor, and State Legislature. They claim the political credit for cutting taxes, but what they did is more accurately describe as a tax shift than a tax cut. st They shifted taxes in three ways, 1 they shifted the kind of tax; they cut property tax, but raised the sales tax from 6 to 7 percent, and put pressure on localities to raise local nd income taxes. What they gave with one hand they took away with the other. 2 they rd shifted the geography of responsibility for taxes from the State to the localities. 3 they shifted the burden of taxes away from business and onto individuals, thus compounding the effects of market based assessments and the abolishment of the inventory tax. The State Legislature created a circuit breaker, but it is a very peculiar circuit breaker, other states with circuit breakers cap residential property tax payments as a percentage of income, thus helping homes owners who might have difficulty paying property taxes. But Indiana caps property tax payments as a percentage of gross assessed value, thus including in the tax cut some people who are likely quite capable of paying their taxes. It is similar to the bate and switch tactics that he has seen at the Federal Level. Promise the people a tax cut, but then give the biggest cuts to the wealthiest and hope that the benefits will trickle down to the rest. It didn’t work then and it won’t work now. The problem is not the existence of taxes but the fairness of who pays the tax. He stated that there are not too many people who would want to live in a community where there are pot holes in the roads with libraries that are often closed within adequate police and fire protection. He stated that he thinks that the President-Elect got it right when he said that we should be cutting taxes on people who are struggling and raising taxes on the people who receive the lion’s share of tax cuts in the past, those making over $200,000.00 in income. He stated that he would add to list of people who should pay more are tenured Professors at a League Universities with multi-billion dollars endowments. Although he can assure most that most professors unlike head football coaches come no where near the $200,000.00 income level. He stated that option is not available in South Bend, they only have the option of a local income tax that increases everyone taxes. He suggests to adopt the tax to prevent a drastic cut in services and jobs, but then he thinks that the community should come together to demand some changes from the State Legislature. Taxes that are fairer 9