07-13-09 Common Council Minutes - Laserfiche WebLink

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REGULAR MEETING JULY 13, 2009 legislation to make private institution pay for services for when dignitaries and other officials come to town and use police, fire and other city services, but it just did not pass. Councilmember Puzzello asked if a person works in South Bend and lives in Granger would the City of South Bend benefit from this by enacting LOIT. Mayor Luecke stated that the taxes that are proposed are countywide taxes, so that everyone who lives in St. Joseph County would pay those taxes, it is not paid by where you work but by where you live. So the taxes would be collected on a countywide basis and distributed by formula by the various units of government. He stated that in public safety it is split amongst those units of government that actually have police or fire departments, not every unit of government will receive public safety LOIT distributions. The property tax relief will be distributed county wide and benefit on percentage of tax levy. Councilmember Varner advised that it is true that the not-for-profit pay good salaries and it is true that many of them work in South Bend, but if in fact that person lives in Granger yes it is collected county wide but the distribution formula from the State back to the County is based on where they live rather than where they work. Mayor Luecke stated that the distribution is really based upon percentage of levy by each unit of government. South Bend’s levy compared to St. Joseph County levy compared to Mishawaka’s levy is how the full amount is collected county wide ends up being distributed. So it’s really neither by where you live or where you work it’s by percentage of cost of government. Councilmember Varner asked if there is a net gain to the city? Mayor Luecke stated that he believes there is. Councilmember Varner stated that it will be in dollars, but we just don’t know the formula yet. Councilmember Rouse asked if a person works in St. Joseph County, specifically South Bend, and lives in Elkhart, will they have to pay the tax? Mayor Luecke stated that they will not pay the tax. On the other hand if they live in St. Joseph County and work in Elkhart, they do pay the tax. Councilmember Kirsits ask the Mayor to speak to some of the area Counties that have Local Option Income Tax. Mayor Luecke stated that Elkhart County has 1 ½ % LOIT; they enacted their CAGET when it was first available so they actually had a LOIT twenty (20) years longer than South Bend, providing property tax relief as well as additional dollars for government. He stated that in comparison as a range of income taxes with the state for instance: Pulaski County is the highest local income tax with a rate of 3.13%; Jasper 3.05%; Wabash 2.9%; Morgan 2.72%; Parke 2.55%; Jay 2.45%; Fayette 2.37%; Benton at 2.29%; Brown 2.2%; Warren 2.12%; Walls 2.1%; Montgomery 2.1%. He stated that there are a variety of counties that range at between 2% and 1 ½ %. He noted that LaPorte County is at .95%; and Starke County is at 1.06%. Councilmember Kirsits stated that by no means is St. Joseph County going to be the highest county for a local option income tax. The Mayor stated that is correct. Mayor Luecke stated that South Bend has the same property tax caps as every other county in the State, so 1 ½ % for homeowners this year, 1% next year, however, the debt service in the County will be added on top of that for property tax payers. He stated that he does not know exactly what that will be, he stated that he would guess around .1 or .2 16