A proposed tax adjustment was narrowly voted down by the Pulaski County Council Monday. The change would have resulted in a slight decrease in the county’s local income tax rate, while allowing property taxes to increase on non-homestead property.
Several audience members spoke in favor of the proposed changes, including representatives from all three of the county’s public library systems. Community Development Commission Executive Director Nathan Origer said that in his personal opinion, the current system of relatively high income taxes but low property taxes amounted to “corporate welfare.”
The ordinance up for approval would have involved lowering the local income tax earmarked for property tax relief, while raising the “levy freeze” portion. But it was brought to the council’s attention that there are other options that would achieve similar results, depending upon how much funding the council decides to share among towns, townships, and libraries.
Council members also pointed out that even with no action, property taxes will go up somewhat due to the levy freeze “thaw” approved earlier this year. That means the county’s property tax levy may once again increase by an amount determined by the state. On top of that, the county’s income tax rate is already set to drop by 0.3 percent at the end of 2020, since the special income tax for the jail is scheduled to expire. Another concern was that the proposal sought to put the tax increase specifically on non-homestead property rather than all property.
The way the proposed changes were advertised to the public apparently only gave council members the option to approve them as presented or deny them entirely, rather than adjust the language. But Monday’s meeting was the council’s last chance to make tax adjustments that could impact the 2020 budget. Even though there is another year before the expiration of the jail tax takes a big hit on the county’s budget, the county is still expected to be in a deficit in the meantime. Additionally, the county’s ability to raise the “levy freeze” portion of the local income tax now goes away completely, due to the previously-approved “thaw.”
In the end, the proposed ordinance was voted down by a vote of four-to-three. Rudy DeSabatine, Scott Hinkle, Jay Sullivan, and Mike Tiede voted against the measure, while Ken Boswell, Kathi Thompson, and Brian Young voted in favor. That’s the same split seen during several recent votes related to the county’s budget.