07-13-09 Common Council Minutes - Laserfiche WebLink

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REGULAR MEETING JULY 13, 2009 percentage additional. However, the City of South Bend is not contributing to that; the City of South Bend has no property tax based bonds out. He stated that the Redevelopment Commission does have one property tax based bond that is contributing minimally at 2% of the total indebtedness in St. Joseph County is due to either South Bend or the Redevelopment Commission in terms of property tax bonds. Council President Dieter asked what the average tax payer; homeowner; employed person would pay? Mayor Luecke stated that they did four (4) examples of how the .95% additional local option income tax would affect different tax payers. For a single elderly retiree over 65 years with $17,700 in income, $10,860 from Social Security which is not taxed by either the State of Indiana or Local Option Income Taxes it would mean an additional $42.00 per year. For a single mother $13,624 income, filing as head of house hold with one child, it would mean an additional $97.00 dollars per year. For a median income family making $41, 565; one working parent; filing jointly with two children an additional $329.00 per year. For a two income family of $64,656.00 filing jointly with three children would be an additional $524.00 per year. He stated that any of those taxpayers who are also homeowners would already be receiving property tax breaks both from the property tax LOIT as well as HEA 1001. Council President Dieter asked that if passed would it take effect October 1, 2009. Mayor Luecke reiterated that if passed before the end of July, the tax would take effect st October 1, they would start collecting, and the State indicated that they would start making distributions to St. Joseph County in January 2010. Councilmember Oliver Davis asked how stimulus dollars from the federal government play into this whole situation. Mayor Luecke stated that first stimulus dollars don’t really play a part in this, however, they are going to receive some dollars that would be available for road work, vacant and abandoned housing, and there are some stimulus dollars that are going to help with unemployment compensation benefits and some health care benefits for low-income individuals. He stated that City is applying for stimulus dollars for energy conservation, but again it’s not for general operation of government. He stated that it is the City’s hope to use some of those energy dollars to find ways to save energy costs in City facilities that will help the budget long-term, but the stimulus dollars themselves cannot supplement the City’s revenue. He stated that the City is applying for stimulus dollars for other neighborhood development initiatives and hopeful to get stimulus dollars to put hydro-electric power plant at the dam in downtown South Bend, that again would provide some long-term energy savings for the City but nothing that really applies to the $22 million dollar revenue shortfall that the City sees for next year. Councilmember Varner stated that he wasn’t sure where the numbers came from Umbaugh, but the numbers that were reported in the South Bend Tribune because of the additional 1% increase in sales tax, people are paying an additional $177 a family in sales tax per year. Mayor Luecke stated that he did not think it was fair to add the state’s tax increase to this issue. Councilmember Varner clarified what he was comparing was that most people won’t think that .95 is a large number, it’s the aggregate burden that people face overall. He stated that he wasn’t trying to comparing the two, but wanted to give an example. Mayor Luecke stated that when he looks at his taxes and he invited everyone to do the same. He stated that his local taxes, combined property taxes plus local income taxes are about ½ of the state taxes that he pays and about 10% of the federal taxes that he pays and he thinks that the best bargain that he gets for his money are the local income taxes 17