The Hancock County Council on Wednesday approved a 0.2 percentage-point increase in the county’s local income tax — bumping it to 1.94% from 1.74% — to pay for a new county jail that could cost up to $43 million. What does this tax increase, which goes into effect Oct. 1, mean for Hancock County residents?
How will this increase affect me?
You will notice a little less money in your paycheck, because this is a tax on your income. A person earning $30,000 a year will pay an additional $60 a year. Someone earning $50,000 a will would pay an additional $100. The median household income of the county in 2017 was $73,294, so the typical household will pay an additional $146.59.
Where will Hancock County rank among Indiana counties for income tax rates?
According to current Indiana income tax rates, Hancock County’s 1.74% rate ranks 49th in the state, among 92 counties, according to the Indiana Department of Revenue. With the 0.2 percentage-point increase, the county will jump about a dozen spots, to 36th in the state. Among counties in the Indianapolis metro area, only Morgan County’s 2.72% income tax rate and Marion County’s 2.02% rate are higher. Johnson County and Hamilton County each have 1% tax rates.
Have any other Indiana counties increased income taxes for a jail?
Five counties in 2018 approved 0.2 percentage-point hikes to build jails — Cass, Carroll, Dearborn, Huntington and Jennings counties. None of those counties has started construction, and many aren’t far along in design, according to news reports in each county.
How can the county raise taxes for the jail when I voted against the $55 million referendum?
When voters turned down a $55 million referendum in May 2018 that would have paid for a new county jail and improvements to other criminal justice facilities, they voted against using property taxes to fund the project; they didn’t bar the county from proceeding with a jail project. The state allows counties to raise income taxes by no more than 0.2 points over 22 years to fund correctional and rehabilitation facilities. The county council had two public hearings on the tax increase and discussed the idea for about a year.
Why will the tax last 22 years, instead of the former 20-year time frame?
County officials have said the longer time frame — put in place this year by the Indiana General Assembly — will give the county more time to collect money to finance projects. The county won’t start seeing the money in its coffers until about January. The tax will last until 2041.
How will the tax monies be spent?
Council members have said they aim to use 85 percent of the new revenue for construction and 15 percent for staffing. Hancock County Sheriff Brad Burkhart said he hopes the county can hire 22 additional jailers in 2020 and 2021 to bring the full staff to 49. The council tentatively approved the hire of 12 jailers in 2020. That will get finalized once the county budget is approved in the fall.
When will jail construction begin?
Construction could start by the fall, and the bidding process could begin next month on the 440-bed correctional facility, according to John Jessup, president of the Hancock County Board of Commissioners. If the timeline stays on track, the jail might open as early as March 2021.
