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Council finalizes budget, discusses LOIT

Tuesday, October 6, 2009

Larry Moss
The Clay County Council approved its 2010 budget Monday night, but its members had their minds focused on the future.

During the meeting, the budget passed 6-1 with Larry Moss casting the lone vote of rejection.

"I had told some people I would not approve of the budget unless some staffing cuts were made," Moss told The Brazil Times. "Even if a Local Option Income Tax (LOIT) is passed, we will still be facing a shortfall next year and have to make even more cuts. I made a promise and I can't go back on it because we need to be making bigger cuts and create more savings now."

Given that sentiment and facing an Oct. 31 deadline, the council conducted a preliminary discussion regarding the financial status of the county and LOIT options.

"We have to seriously consider instituting a LOIT because we will have a shortfall next year, and will have an even bigger hit in 2011," Council President Mike McCullough said. "However, we can't just focus on the county alone because other taxing units, especially the City of Brazil, will be struggling with less property tax revenue."

Council members agreed no matter if they pass one or multiple LOIT options, it would not fully compensate for the potential loss in property tax funding.

"With the things the state legislature has done to basically help out the larger counties, it makes you wonder if they really considered the impact the property tax caps would have on smaller rural and farming counties," McCullough said.

Brian Wyndham
"It's almost as if the state is trying to take away the power from local governments to determine what is best for them," council member Brian Wyndham added. "It is not just putting Clay County in a tough position, but many counties across the state, and some of them are already having mass layoffs."

Because of the in-depth consideration needed to decide which LOIT options to utilize, the council set a special meeting for 6 p.m., Monday, Oct. 19, in the Commissioners' Courtroom at the Clay County Courthouse, to discuss the matter further. The public is welcome and encouraged to attend.

Meanwhile, the council approved final action on a pair of tax abatement resolutions for BioEnergy Development, but not without some questions being raised.

Moss informed representatives from BioEnergy he was told from a couple of reputable sawmills the wood waste supply might not be available to adequately sustain the business.

"We would be getting the wood waste directly from an accumulator in Southern Indiana," BioEnergy President Robert Swain said. "From our studies, there is about 400,000 tons of wood waste available within a 100-mile radius of Terre Haute, and we are planning to use at least 250,000 tons."

Clay County Assessor Mark Barnhart raised his own concerns about granting abatements for BioEnergy given the fact a deed for the property has not been recorded to show ownership.

"We do have an option right now for 80 acres," Swain said. "Right now, we are still waiting on the Indiana Department of Environmental Management (IDEM) to complete their studies on our permit status."

McCullough added, "They won't be able to build unless they own or lease the property. Along that line, they wouldn't need a tax abatement if they weren't planning on constructing a building."

The resolutions were passed, allowing a 10-year term on both the Personal Property and Real Estate applications. Also, BioEnergy agreed to have the abatements subject to the Abatement Calculation Agreement (clawback).

In other business during Monday's meeting, the Clay County Council:

* Conducted a Non-Binding Review of the budgets from all taxing units. Based on legislation, the county council must review all budgets, but may not modify or suggest changes, and can only provide a positive or negative recommendation to the Department of Local Government Finance. The council gave a positive recommendation for all budget that had been received,

* Approved amended salary ordinances for WIC (Fiscal Year 2010), STOP and VOCA programs, all of which are paid through grant monies, and

* Approved a transfer of $3,256.30 within the Highway Fund for the purchase of a new gas pump, a reduction of $2,500 in the same fund from road equipment, which was used as an additional appropriation for a furnace which will burn used motor oil in hopes of saving on energy costs, and a separate additional appropriation in the Jail CAGIT Fund of $175 for professional services.

The next regular meeting of the Clay County Council will be 6 p.m., Monday, Nov. 2, in the Commissioners' Courtroom at the Clay County Courthouse.

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Let's discuss facts here. I know that the existing county income tax is not called that, but a "property relief tax" HOWEVER it is based upon one's income so in reality there is already a local income tax and in some cases people end up paying MORE than they would had it been their property tax.

When one looks at their paycheck stub there is a Clay County tax taken out that is determined by what that person makes. Somewhere between 1.5 and 2% of gross earnings by my rough calculation. Another reader may have exact number at their fingertips.

So what I'm trying to say here is to the local working people, this is not a new tax, just an increase in a tax that is already being imposed. Let's be honest. I'm not saying that it isn't necessary and I'm not saying that those who make more shouldn't contribute more but some are already contributing more than they would be had that "property tax relief" not be in existence at all. What ever is decided it can't but have a lopsided effect on certain populations in the county. Those who make more in their paycheck but live in modest homes will end up paying more than those who make less but have huge landholdings. Either way those who own little or nothing end up paying through their earnings as well as via their rent as landowners pass their property tax expense on to their renters.

Council members need to call a spade a spade and realize that increasing income tax in some cases is going to make some pay even more than they would had the property tax been left alone. Put the property tax relief back as property tax as it should be so those who choose to own property that is worth more can pay for the amenities that are supplied by the county to sustain that property's value on the marketplace. Those who live in their homes already have a homestead exemption and like the recent city water bill, need to be brought into the 21st century as far as what it actually costs to maintain amenities in a community.

Then taxpayers need to get rid of the Governor's 1,2,3% hogwash that taxes one type of landowner over another and realize that that homestead exemption already does favor the owner who lives on their property over those with businesses and rental property. They was the Governor wants it done makes it overly lopsided in favor of the homeowner and financially over burdens small communities such as Clay County where the bulk of revenues comes from residential property that is now discounted to such an extent that it is impossible for local governments to function. Until then we have no choice but to be taxed by another method in order to preserve the value of property in the county by maintaining local services and roads. At least the commissioners aren't talking about a county sales tax which would be very regressive towards the poor here as it would tax those at all economic levels the same dollar for dollar on what they needed to purchase and not what they earned. that would be a worse case scenario in a county where such a high percentage are at or below poverty level.

-- Posted by Jenny Moore on Wed, Oct 7, 2009, at 3:21 PM

The last thing this community needs right now is additional taxes of any kind. County officials should make the tough choices and cut spending. When revenues decrease, expenses must decrease to match. I believe the county generally does a good job as stewards of the taxpayers money. But why would we increase tax revenue available to the city of Brazil? We have little to show for our taxes so far.

Do the right County Council and vote against any new tax! Taxpayers (voters) will understand that cuts in services have to be made to meet budgets much better than you think.

-- Posted by fiscallyresponsible on Thu, Oct 8, 2009, at 11:13 AM

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