Tag Archives: LIT

2018 Local Income Tax (LIT) Numbers for Monroe County Show Strong Economic Growth

1 Aug

One of the numbers that nearly all local governments eagerly await each year before setting budgets is the amount of local income tax (LIT) it will be receiving for the ensuing year. While this information arrives in several stages of increasing refinement, the first indicator that counties receive is the estimate of local income taxes for the county as a whole for the budget year by the Indiana State Budget Agency.

Today, Indiana counties received their 2018 Certified Distribution estimates from the State Budget Agency. Here is a table summarizing these estimates and comparing them to the 2017 certified distributions for Monroe County:

Screenshot 2017-08-01 19.29.30

These numbers represent very good news for Monroe County residents. The overall increase in local income tax collections for Monroe County is 4.27%, demonstrating robust growth in the income earned by Monroe County residents.

Just as a reminder, Monroe County’s local income tax (LIT) rates are as follows:

  • Expenditure – Certified Shares: 0.9482%
  • Expenditure – Public Safety: 0.2500%
  • Expenditure – Economic Development: 0%
  • Property Tax Relief: 0.0518%
  • Special Purpose (for Monroe County, this rate is for juvenile services): 0.095%
  • Total Income Tax Rate: 1.345%

The amounts shown in the table above will be distributed to various local government units:

  • Certified shares will be distributed to all civil taxing units except Solid Waste District, which means the county, cities and towns, townships, the public library, Perry-Clear Creek Fire Protection District, and Bloomington Transit
  • Public safety will be distributed first to the Dispatch Center (in a percentage determined by the Monroe County Income Tax Council), then to township fire departments (in an amount determined by the Income Tax Council), and then among the county and the three cities and towns (Bloomington, Ellettsville, and Stinesville).
  • Property Tax Relief will be used to offset the property taxes of homestead properties
  • Special Purpose goes to juvenile services in Monroe County, which includes youth services (including the Binkley House Youth Shelter), juvenile probation, and juvenile courts

The State Budget Agency will provide updated numbers to Indiana counties before October 1.

 

 

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Indiana 2017 Local Income Tax Rates: Where Does Monroe County Stand?

23 Nov
Monroe County Courthouse at Night

Monroe County Courthouse at Night

The Indiana Department of Local Government Finance just released the final 2017 certified distributions and rates of local income taxes for Indiana counties. Local income taxes are what used to be called COIT, LOIT, CAGIT, CEDIT, etc., before a new law that went into effect in 2016 that simplifies local income taxation. All local income taxes are now simply referred to as Local Income Taxes (LIT). The full report from DLGF is available here: 2017_certification_calculations.

Under the new system, there are essentially 3 broad categories of local income tax rates: expenditure, property tax relief, and special purpose. Expenditure rates are there to raise funds for local government expenditures. Property tax relief rates use the money raised from income to offset property taxes. Note that this does not necessarily mean that taxpayers will see lower property taxes — these property tax relief rates are often used in communities where the constitutional circuit breakers (tax caps) have lowered property tax revenues. So the property tax relief rate would simply replace property tax revenue that had been lost through the tax caps; since the taxpayers in this case  would already be  at the circuit breaker, they wouldn’t necessarily actually see lower property taxes. Thus in reality the property tax relief rate may generate expenditure revenue as well. Finally, the special purpose rates are used for a variety of purposes, all of which require special legislation. Our local example is Monroe County’s Juvenile County Option Income Tax (JCOIT), a 0.0950% income tax that supports juvenile services, including the Binkley House Youth Shelter, juvenile probation, and the juvenile courts. Other examples include jail and juvenile facilities for a number of counties, library property tax replacement for Hancock County,  and courthouse renovation and maintenance and firefighting equipment in Randolph County.

Expenditure rates themselves are divided into 3 “buckets”: certified shares, public safety, and economic development. Certified shares are divided  up among all civil taxing units in a County (civil taxing units include the county, any municipalities, townships, fire protection districts, and public libraries), and the revenue can be used for any lawful purpose of the local unit government. Revenues from the public safety rates are distributed to the county and any municipalities in the county, and can only be used for public safety purposes (including police, jail, probation, fire, and EMT). Revenues from economic development rates are distributed to the county and any municipalities in the county, and can be used for a variety of economic development purposes, as well as any other expenses of the local unit of government.

Monroe County’s local income tax (LIT) rates are as follows for 2017:

  • Expenditure – Certified Shares: 0.9482%
  • Expenditure – Public Safety: 0.2500%
  • Expenditure – Economic Development: 0%
  • Property Tax Relief: 0.0518%
  • Special Purpose: 0.095%
  • Total Income Tax Rate: 1.345%

So how does Monroe County’s income tax rate of 1.345% stack up against other counties? I took the data from the DLGF and ranked counties by total income tax rate:

County Name Total 2017 LIT Rate Rank
Pulaski 3.3800% 1
Wabash 2.9000% 2
Jasper 2.8640% 3
Morgan 2.7200% 4
Parke 2.6500% 5
Tipton2 2.6000% 6
Miami 2.5400% 7
Brown 2.5234% 8
Jennings 2.5000% 9
Cass 2.5000% 9
Jay 2.4500% 11
Fayette 2.3700% 12
Randolph 2.2500% 13
Clay 2.2500% 13
Grant 2.2500% 13
Warren 2.1200% 16
Rush 2.1000% 17
Wells 2.1000% 17
Jackson 2.1000% 17
Montgomery 2.1000% 17
Elkhart 2.0000% 21
Clark 2.0000% 21
Clinton 2.0000% 21
DeKalb 2.0000% 21
Washington 2.0000% 21
Fulton 1.9300% 26
Perry 1.8100% 27
Benton 1.7900% 28
Steuben 1.7900% 28
Marion 1.7700% 30
Union 1.7500% 31
Daviess 1.7500% 31
Huntington 1.7500% 31
Noble 1.7500% 31
Putnam 1.7500% 31
Lawrence 1.7500% 31
Madison 1.7500% 31
St. Joseph 1.7500% 31
Starke 1.7100% 39
Carroll 1.7039% 40
Hancock 1.7000% 41
Howard 1.6500% 42
Adams 1.6240% 43
Fountain 1.5500% 44
Blackford 1.5000% 45
Franklin 1.5000% 45
Shelby 1.5000% 45
Wayne 1.5000% 45
Boone 1.5000% 45
Hendricks 1.5000% 45
Delaware 1.5000% 45
Henry 1.5000% 45
Martin 1.5000% 45
Lake 1.5000% 45
Whitley 1.4829% 55
Scott 1.4100% 56
LaGrange 1.4000% 57
Ripley 1.3800% 58
Allen 1.3500% 59
Monroe 1.3450% 60
Decatur 1.3300% 61
White 1.3200% 62
Owen 1.3000% 63
Bartholomew 1.2500% 64
Greene 1.2500% 64
Marshall 1.2500% 64
Ohio 1.2500% 64
Orange 1.2500% 64
Vigo 1.2500% 64
Floyd 1.1500% 70
Tippecanoe 1.1000% 71
Crawford 1.0000% 72
Dubois 1.0000% 72
Hamilton 1.0000% 72
Harrison 1.0000% 72
Johnson 1.0000% 72
Knox 1.0000% 72
Kosciusko 1.0000% 72
Newton 1.0000% 72
Switzerland 1.0000% 72
Posey 1.0000% 72
Vanderburgh 1.0000% 72
LaPorte 0.9500% 83
Spencer 0.8000% 84
Pike 0.7500% 85
Gibson 0.7000% 86
Dearborn 0.6000% 87
Porter 0.5000% 88
Warrick 0.5000% 88
Jefferson 0.3500% 90
Sullivan 0.3000% 91
Vermillion 0.2000% 92

As this table shows, Monroe County ranks 60th in overall income tax rates in Indiana, out of 92 counties. This puts us essentially at the top of the bottom third of Indiana counties in terms of overall income tax rate.

One concern with this ranking methodology that has been raised is that some of these local income taxes have been passed for property tax relief, and since these taxes offset property taxes, the property tax relief taxes really shouldn’t “count” against a county in its overall income tax rate for the purposes of comparison. I don’t necessarily agree with this logic, since, as I mentioned above, property tax relief rates don’t necessarily actually give the taxpayers any “relief”, and are instead just used to offset losses to local government from the tax caps. But nonetheless, in the following table I eliminated the property tax relief rates from the calculation, and re-ranked counties.

County Name Revenue Total Revenue Rank
Tipton 2.4000% 1
Jennings 2.2500% 2
Pulaski 2.2000% 3
Parke 2.1500% 4
Brown 2.0234% 5
Jasper 2.0140% 6
Rush 2.0100% 7
Wabash 1.9000% 8
Jay 1.8500% 9
Warren 1.8000% 10
Randolph 1.7500% 11
Elkhart 1.7500% 11
Union 1.7500% 11
Perry 1.7254% 14
Marion 1.7193% 15
Morgan 1.7180% 16
Wells 1.7000% 17
Starke 1.6500% 18
Jackson 1.6000% 19
Carroll 1.5039% 20
Cass 1.5000% 21
Clay 1.5000% 21
Clark 1.5000% 21
Clinton 1.5000% 21
DeKalb 1.5000% 21
Washington 1.5000% 21
Benton 1.5000% 21
Steuben 1.5000% 21
Daviess 1.5000% 21
Huntington 1.5000% 21
Noble 1.5000% 21
Putnam 1.5000% 21
Blackford 1.5000% 21
Franklin 1.5000% 21
Shelby 1.5000% 21
Wayne 1.5000% 21
Boone 1.5000% 37
Miami 1.4796% 38
Fulton 1.4500% 39
Hancock 1.4500% 39
Fountain 1.4500% 39
Whitley 1.4500% 39
Hendricks 1.3500% 43
Owen 1.3000% 44
Monroe 1.2932% 45
Fayette 1.2500% 46
Grant 1.2500% 46
Lawrence 1.2500% 46
Madison 1.2500% 46
Adams 1.2500% 46
Delaware 1.2500% 46
Henry 1.2500% 46
Martin 1.2500% 46
Scott 1.2500% 46
LaGrange 1.2500% 46
Ripley 1.2500% 46
Decatur 1.2500% 46
White 1.2500% 46
Bartholomew 1.2500% 46
Greene 1.2500% 46
Marshall 1.2500% 46
Ohio 1.2500% 46
Orange 1.2500% 46
Vigo 1.2500% 46
Howard 1.1500% 65
St. Joseph 1.1496% 66
Floyd 1.0500% 67
Montgomery 1.0000% 68
Crawford 1.0000% 68
Dubois 1.0000% 68
Hamilton 1.0000% 68
Harrison 1.0000% 68
Johnson 1.0000% 68
Knox 1.0000% 68
Kosciusko 1.0000% 68
Newton 1.0000% 68
Switzerland 1.0000% 68
Allen 0.9821% 78
Tippecanoe 0.9589% 79
LaPorte 0.9500% 80
Posey 0.9440% 81
Vanderburgh 0.9035% 82
Spencer 0.7611% 83
Pike 0.7500% 84
Gibson 0.7000% 85
Dearborn 0.6000% 86
Lake 0.5000% 87
Porter 0.5000% 87
Warrick 0.5000% 87
Jefferson 0.3500% 90
Sullivan 0.3000% 91
Vermillion 0.2000% 92

From this ranking, excluding property tax relief income tax rates, Monroe County comes out at 45, right in the middle of Indiana counties. So depending on how you look at it, Monroe County is right in the middle or atop the bottom third of Indiana counties in terms of income taxes.

There  is a lot more to explore with this data. Next I will focus more specifically on our neighbor counties.