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News-Sentinel.com Your Town. Your Voice.

Is this the time for a tax increase? Maybe not, but it's OK to talk about it

Officials from throughout Allen County will gather later this month to discuss possible tax increases — but say there are no current plans to do so. (News-Sentinel file photo)
Officials from throughout Allen County will gather later this month to discuss possible tax increases — but say there are no current plans to do so. (News-Sentinel file photo)
John Crawford
John Crawford
Therese Brown
Therese Brown
Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.The Associated Press
Monday, January 23, 2017 09:01 pm
Is a special meeting devoted exclusively to a variety of taxes proof people should guard their wallets? Not necessarily, insists a Fort Wayne City Council member who will head just such an event for officials and residents from throughout Allen County later this month. "The goal is to get discussion going," said John Crawford, R-at large, who has organized a rare meeting of the Allen County Income Tax Council for Jan. 31 to talk about not only the future of local income taxes but other public revenue sources as well, including taxes on vehicles and business personal property and even a new tax authorized by the state's "Regional Cities" program, which has earmarked $42 million for projects in northeast Indiana — projects that must be supported by local matching funds.

But the desire to equip Allen County to attract as much of that $42 million as possible is just one of the motivations behind the meeting to begin at 5:30 p.m. Jan. 31 at the Ash Brokerage building, 888 S. Harrison St. Under Indiana law the Tax Council — which includes all city and town councils in the county — has authority over local local income taxes. But because Fort Wayne has more population than the rest of them combined, its City Council can increase local income taxes unilaterally, as it did in 2013 when it increased the rate by 0.35 percent.

"I thought, 'The council never meets and it might not be a bad idea,' " Crawford said. "When I ran (for office) the last time, I was all in for riverfront development.  But if you want something, you need a revenue stream."

The city's Legacy fund, created through the sale of its old electric utility, has provided $10 million for construction of the $20 million first phase of riverfront development, and the city has requested another $5 million from Regional Cities. Tuesday, City Council will consider a $2.5 million Legacy loan for the $32 million redevelopment of the Columbia Street "Landing," which is also seeking $7.1 million in Regional Cities cash. But some council members have expressed concerns the Legacy fund is being depleted too quickly, and new revenue sources could prolong its existence and produce additional benefits for Fort Wayne, Crawford said.

The question is: Where would those new dollars originate?

At the Jan. 31 meeting, Greater Fort Wayne CEO Eric Doden and Northeast Indiana Regional Development Authority Chairman Jeff Turner will discuss one possibility: a "regional development authority" tax that can be implemented by counties eligible for Regional Cities funds. If adopted, that 0.05 percent income tax would raise $4 million countywide every year, with the funds going to the Regional Development Authority as a local match for Regional Cities grants.

Crawford said a more politically appealing option might be to increase the existing local income tax, which is currently at 1.35 percent but could go as high as 3.75 percent. Local officials would decide how best to use that money.

Allen County Therese Brown, meanwhile, will discuss the wheel tax-surtax, which pays to maintain roads and other infrastructure. Last year City Council adopted a first-ever city tax, and County Council extended its $20-per-car tax through 2029. But the agreement under which the city returns a portion of its county wheel tax revenues to the county for bridge maintenance expires this year unless reauthorized, and Brown said "it would be appropriate to consider raising (the tax). We have 400 bridges."

City Councilman Jason Arp., R-4th, will also discuss his plan to eliminate taxes on business equipment. The tax generates $51 million countywide every year, and council rejected Arp's proposal last October. But Crawford said at the time he could support the proposal to attract jobs if a way to offset the lost revenue could be identified.

Greater Fort Wayne has advocated increasing taxes to pay for economic development projects it believes will attract more people and jobs to northeast Indiana and last year released a study indicating the county has the capacity to issue up to $350 million in bonds to pay for those projects. But bonds must be repaid, and other taxes being eyed for increases — such as the hotel-motel and restaurant taxes — are not even on the agenda Jan. 31.

As I reported last week, Allen County has a $15 million surplus to begin the year, and Mayor Tom Henry said last week the city's cash reserve could reach $10 million by next year. That could complicate any call to increase taxes, and no taxes should be increased without a thorough review of the positive and negative impact. But with several big-dollar economic development and street projects in the pipeline and the desire to maximize the county's Regional Cities potential, Crawford is right: It doesn't hurt to talk.

Space is limited, so if you want to attend RSVP to jncrawfordmd@gmail.com.

This column is the commentary of the writer and does not necessarily reflect the views or opinions of The News-Sentinel. Email Kevin Leininger at kleininger@news-sentinel.com or call him at 461-8355.

 

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