Steps are being taken to determine exactly how much the property tax caps will affect budgets throughout Clay County.
In a special meeting Wednesday, the Clay County Council approved an additional appropriation of $30,000, which will be used to pay for professional services from Umbaugh and Associates, Indianapolis, to conduct a Circuit Breaker Impact Review.
"This is a parcel-by-parcel study to figure out an exact figure of how much each of the taxing units may lose in property tax levy funding because of the caps, which go down to 1, 2 and 3 percent next year," Council President Mike McCullough said. "We're almost at a point where we will have to institute a Local Option Income Tax (LOIT), and it is better to have exact figures rather than estimates for us to determine the best plan of action."
The council also approved the agreement to conduct the study and send out a form letter to each of the taxing units notifying them of their allocation fee, which is prorated, based on the respective budget levy.
"The county is being charged fully for doing this for all the entities," Clay County Auditor Mary Jo Alumbaugh said. "We can send out a letter to all the taxing units requesting them to cover their portion of the cost since the study will benefit all of them, but we're not going to go after them if they don't pay."
According to the Illustrative Fee Allocation, 13 of the 23 taxing units have a fee of less than $100, with Cass Township's recommended fee the lowest at $6.
"It really is unreasonable to require the areas with a small fee to pay because it could cost more to process it through," Alumbaugh said.
Meanwhile, the council conducted a brief discussion in preparation for the upcoming county budget hearings, set for Sept. 1-3.
"It looks like the majority of the proposed increases are for salaries," McCullough said. "But, the way things are looking, we may not be able to give any raises this year."
The council talked about the three options available for instituting a LOIT, which none of the council members appeared to be happy about.
"With the way things are economically right now, people are just getting by as it is," council member Rita Rothrock said.
Some counties have already set all three LOIT options into motion in anticipation for the losses in levy funding, but McCullough admitted it has always been something the council wanted to wait to consider until there was no other option available to compensate for lost funding.
"The last thing we want to do is add another tax on the residents," he said. "But when levies are going to take a large hit, we have to look into the possibilities in comparison to the option of cutting services, which we don't want to do either."
Alumbaugh informed the council should they decide to institute a LOIT, the Department of Local Government Finance has mandated it must be done by Oct. 1.
Due to the Labor Day holiday, the next regular meeting of the Clay County Council will be 6 p.m., Tuesday, Sept. 8, in the Commissioners' Courtroom at the Clay County Courthouse.