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Council votes to cut taxes for 2013

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GREENFIELD — Income taxes in Hancock County will decrease slightly next year and a controversial bond will not be issued after all.

The Hancock County Council held a lengthy debate Wednesday morning about how to fix the county’s aging roads but at the same time keep taxes down for residents.

Decisions made in the meeting essentially flipped what officials had been discussing for the last two months. The result is that there will be more money in the pockets of taxpayers.

The council decided to lower income taxes by 0.10 percent because a complicated switch in income taxes approved earlier this year was not approved by the state.

Also in the meeting, the group decided not to issue a controversial $2 million bond. After escalating public scrutiny, elected officials grew hesitant about borrowing money. The council was deadlocked in the vote for a bond, which would have been used primarily to purchase 12 new highway department trucks for paving and plowing.

Three members voted in favor of it, three were against it and one was absent. Because of the tie, the motion for the bond failed.

John Jessup, Joe Skvarenina and Brian Kirkwood voted against the bond, while Rosalie Richardson, Jim Shelby and President Bill Bolander voted in favor of it; Tom Roney was absent.

Richardson said even if the council were to hold another meeting with all members present for another vote, it would be too late for the bond to impact the 2013 budget.

The net result of the meeting, Richardson said, is that property taxes will be lowered by  one-tenth of 1 percent next year but there won’t be as much money for fixing the county’s aging roads as some members had hoped.

While county officials have been at odds in the last few weeks over taxes and the 2013 budget, one thing officials agree on is they need to find a way to put more money into road maintenance.

One plan all approved last month switched the way income taxes work in the county for what some called a “one-year attack on roads.”

The plan would have been tax neutral for people who work in the county, meaning they would be paying the same in income taxes to county government next year. But the fund into which those income taxes would have changed, putting about $900,000 more on county roads in 2013.

But an official with the Indiana Department of Revenue said the county cannot make such a switch. County attorney Ray Richardson said he disagrees with the decision, but any result from an appeal in state tax court would be far too late to change the 2013 budget.

Because the income tax switch was turned down, the council decided to lower the local option income tax by 0.05 percent, and the county economic development income tax by 0.05 percent. The total 0.10 percent decrease in income taxes translates to a savings of about $30 a year for a person with $30,000 in earnings.

The $2 million bond for new trucks has been a sticking point since it was first brought up last month.

The bond would have purchased 12 new dump trucks for the highway department, and paid for aerial photography services, the paving of the annex parking lot and a new vehicle for the county assessor.

Proponents of the bond said the move would free up $260,000 a year for road maintenance by allowing the purchase of all the trucks at the same time, eliminating more expensive lease payments.

But opponents of the bond balked at purchasing 12 new trucks all at once, especially when some of the trucks had fewer than 100,000 miles on them.

“I would like to see the highway department on a 12-year cycle, instead of replacing trucks if they have only 60,000 miles,” Jessup said.

“We all borrow money for houses and cars, but we also don’t buy houses and cars we can’t afford,” Skvarenina said, referring to an analogy used earlier in the meeting about how people borrow money in their personal finances for major expenses.

Members of the council and audience alike said they want county officials to have a better financial plan before borrowing money.

The council did, however, decide to pull $600,000 out of its economic development income tax fund for road maintenance. Richardson said even though that’s not as much money as some had hoped for improving roads next year, at least it’s a start.

In a different matter, the council also changed the way the county funds major expenses not related to roads.

About $900,000 is projected to come in to the county’s cumulative capital development fund in 2013, but various departments requested over $1.4 million in capital projects next year.

Jessup suggested only $800,000 of the expenses be allowed, and county commissioners should have better oversight on how the fund is spent. He said if commissioners are more proactive in how the CCD fund works, it could save money in the long run.

“It will eventually lead to the point where we don’t have to discuss a $2 million bond,” he said.

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