GREENFIELD — As Hancock County officials decide how to pay for a new jail and hire enough people to staff it, a state lawmaker wants to clarify how counties can pay for a jail using income taxes.
The Hancock County Council will hold a pivotal public hearing Tuesday night on a plan to raise the local income tax by 0.2 percent. A person earning $50,000 a year would pay an additional $100 in income tax under the proposal.
Part of the discussion Tuesday is likely to focus on how much of that increase could be set aside for operating expenses after the jail is built.
State Rep. Bob Cherry, R-Greenfield, hopes a bill he is sponsoring in the House will offer guidance on that key question. House Bill 1102 would allow counties to earmark up to 20 percent of the income tax hike to cover operating costs, such as salaries, of a new correctional or rehabilitation facility. It would also make the tax hike last for 22 years instead of 20 years.
The state legislature last year passed a law giving counties the option to raise their income tax rate by up to 0.2 percent for no more than 20 years. But the Indiana Department of Local Government Finance stated the law isn’t clear on how counties can spend the money, whether that’s on construction or operational costs, Cherry said. He said the intent of the law was for the funds to be spent on construction.
“When they did it, I was totally against doing any for operating, but after thinking about it, I’ve eased my pain on that a little bit,” Cherry said. He voted in favor of the bill.
Now, Cherry is advocating that counties can use up to a fifth of the tax increase on operating costs, which includes hiring jail staff. He said the proposed amendment to the current law provides clarification for the DLGF and ensures counties don’t use the tax funds solely for operations.
The dilemma facing the council is whether it has enough funding to build and then operate the facility. The council is mulling whether to use all of the tax increase on construction or allocate some to operations. If the jail costs as much as has been estimated — $35 million — there might not be any money left over for operating expenses.
Sheriff Brad Burkhart has said a new 440-bed jail might need double the staff of the current 157-bed jail in downtown Greenfield, or about 53 staffers. The jail is planned to be built on land along U.S. 40 between County Roads 400E and 500E. It will take two years to build. Construction could start as early as late summer.
According to the fiscal analysis of Cherry’s local income tax bill, Hancock County could collect about $4.5 million in 2020 and $4.7 million in 2021 if the council passes the 0.2 percent hike.
The local income tax would rise from 1.74 percent to 1.94 percent. The tax was also raised in 2018 to pay for operations at the Hancock County 911 Center.
Hancock County also joins several other counties that have already raised income taxes to fund a jail or plan to in the future. Of the eight counties that raised income taxes that went into effect on Jan. 1, five approved 0.2 percent hikes to build jails — Cass, Carroll, Dearborn, Huntington and Jennings counties.
At a county jail committee meeting Wednesday, representatives with RQAW, the design firm overseeing the jail project, said the total design and construction costs could amount to about $37 million for the new jail, which includes utilities and infrastructure. RQAW initially estimated jail construction at about $35 million and an extra $3.25 million would be spent on utilities and site preparation. County officials and RQAW have been working to drive down some of the proposed costs before proceeding with bids.
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The Hancock County Council will hold a public hearing on the tax increase at 7 p.m. Tuesday in the Hancock County Courthouse Annex, 111 American Legion Place, Greenfield. The commissioners also have a meeting at 8 a.m. Tuesday in the annex.
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