The Pulaski County Council wants a few more days to consider what direction to take on potential tax adjustments. The county currently has the highest income tax rate in the state, but one of the lowest property tax rates. Council members have been looking at ways to balance those, while also preparing for the end of the special income tax that was put in place to pay for the Justice Center but also covers a large portion of jail operations.
For much of the past year, they’ve been working with a fiscal consultant to try to do that, but during a special session Monday, it was the executive director of the county’s Community Development Commission, Nathan Origer, who presented a list of various options for them to consider. “So really, your options, other than doing nothing, as I presented here, are keep the income tax rate as it is and then either cut everybody’s property tax relief or cut everybody’s tax relief except for homestead,” he explained. “Or, bring the income tax rate down a little bit, and then the same thing, either everybody gets cut a little bit or homesteads don’t get cut and everyone else gets cut at little bit more.”
Origer explained that by cutting the portion of the local income tax earmarked for property tax relief while raising the “levy freeze” portion, the overall income tax rate could stay the same or maybe decrease slightly. But the resulting increase in property taxes would bring in about $900,000 in additional revenue for the county. Towns, libraries, and other taxing entities would also see more money.
Origer pointed out that the adjustment could be arranged so that homeowners would see relatively little change in their property taxes, while pushing the bulk of the impact to large-scale landowners. “Yes, it’s going to hurt locals, but the way farming has consolidated, the people who are going to be affected the most are either really big local farmers or really big non-local investors like Ceres, who don’t pay any of our income taxes,” Origer said. Origer felt that the county’s larger employers would be willing to pay a bit more in property taxes, to attract potential workers by lowering income taxes.
In order for the proposed adjustments to impact the 2020 budget, they would have to be finalized by the end of October. But first, the council would have to reach a consensus on what changes they want to make, put it in the form of an ordinance, advertise it to the public, and hold a hearing, before making a final decision. In the end, council members decided to take a week to digest Origer’s proposal and hold another special meeting next Monday to decide how to proceed.
Origer added that the county’s declining population is a major concern and reducing income taxes may be a step in the right direction. “If we don’t do anything to lower the cost of living in Pulaski County, it’s going to get worse and worse and worse, and all the special legislation in the world ain’t going to help us,” Origer said. “And the state’s going to come in and say, ‘Okay, northern four townships, you’re part of Starke County now. Southwestern four townships, you’re in White or Jasper now. Southeastern, you’re in Fulton or Cass now.’ And there won’t be a Pulaski County Council to worry about. There won’t be a courthouse to save because we won’t have a court anymore.”
But he noted that his proposed adjustments would only make up about a third of the county’s projected deficit, and the council still needs to cut spending and possibly ask for help from the state legislature.
