Local municipalities united in holding off on any decision on local income tax changes

By Dan Spalding
News Now Warsaw

WARSAW — Municipalities across Kosciusko County spoke in unison Thursday, urging a wait-and-see approach to how the local income tax (LIT) rate might eventually be used to shore up finances affected by ongoing property tax reform.

Representatives of some 15 taxing units met with county leaders on Thursday in Warsaw ahead of an eventual looming decision about LIT money as state lawmakers continue to look at different options.

Participants are part of the state-sanctioned Municipal Unit Strategic Taskforce (MUST) that each county needs to create in order to look at how municipalities could consider adjustments to the local income tax to help shore up any anticipated losses from property tax reform.

One by one, each community, including Warsaw and Winona Lake, said they support the wait-and-see approach.

Among those was Milford Clerk Treasurer Tricia Gall.

“The town of Milford would appreciate being made whole of the property tax losses and the local income tax losses that we would have,” Gall said.

No decision is needed until 2028, and County Councilman Joe Irwin, chair of the task force, summed up the county’s approach.

State lawmakers are expected to consider a range of proposals related to tax reform legislation when they meet in January to crafte a new two-year budget.

“There’s two more legislative sessions between now and then. With the uncertainty, we feel it’s best just to table it,” Irwin said.

County Commissioner Sue Ann Mitchell underscored the concern by many that state lawmakers need to address numerous issues before counties can make a decision.

“There is no clear path to explain how you could ever think about adopting (a new LIT ratge). And I think (there is a) list that needs to be worked on to send to the state to tell them these are the things in the legislature that you folks need to work on so that we might be able to make these kinds of decisions,” Mitchell said.

No elected representative spoke out and expressed concern specifically about how tax reform efforts adopted already have hurt their budgetary operations.

One of the few residents at the meeting to speak who was not representing any taxing units was Chris Plack, a Warsaw resident who pointed out how local school districts will have to cope with the future changes without any LIT revenues.

Warsaw’s director of community and economic development, Jeremy Skinner, addressed the task force on how each taxing unit will likely face different scenarios.

“When we talk about property tax losses, some communities are going to struggle with property tax losses because they’re not growing fast enough to cover that. The city of Warsaw is not losing property taxes,” he said.

“We’re just not getting as much as we could have gotten with those cuts. So at the end of the day, it’s not a matter of are we losing revenue. It’s a matter of (us) not getting more than we could have gotten.”

Irwin said he was pleased to see all taxing units in agreement on how to move forward.

The task force agreed to meet again in six months.

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