Sep. 14—ANDERSON — Public hearings on a proposed increase in Madison County's local income taxes to fund construction of a new jail and operating expenses is set for Tuesday.
The Madison County Council will conduct two separate public hearings at 6 p.m. in the council chambers of the Madison County Government Center.
Both public hearings will take place at the same time.
One hearing is on a .2% increase in the local income tax to pay for the construction of a new jail.
The council will consider a .2% increase in the local income tax would generate $5.4 million to cover the bond payments on construction of a new jail.
That tax can be implemented solely by a vote of the Madison County Council under the language of the legislation passed by the Indiana General Assembly to pay for construction costs of new jails.
Financial consultant Brian Colton with BakerTilly said the .2% is the maximum rate allowed by state law.
Colton said the estimated cost of a 400 bed jail would be $86 million with the issuance of a $72.9 million 20-year bond.
The council will also consider a .3% increase in the public safety income tax.
That tax increase could take effect starting in 2022 there has to be a majority vote of the county's tax council by the end of October.
The proposed .3% increase in the public safety income tax would require a majority vote of the Madison County Tax Council.
The tax council consists of the county council and the council's for all the other cities and towns.
That tax is estimated to generate $8 million.
Council President Ben Gale said the county council could vote to adopt the two tax increases at the September meeting because the ordinances were introduced last month.
Gale said the final votes could be delayed until the October council meeting.
"I believe we do have the support for the tax increases," he said.
Gale explained the public safety income tax increase is to have the funding available to pay off the jail bond if county income levels were to decline.
"We could keep the first year of the public safety tax money into a savings account and use the rest for county expenses," he said. "Hopefully the county will be in better financial shape in the future."
Gale said currently the Madison County public safety income tax is the 46th highest among Indiana's 92 counties and a .5% increase would make the county the 40th highest in the state on the local income tax rate.
"The lease payment on the jail would be covered by the correctional rate and the public safety income tax would cover the bond payment if there was a decline in revenues," Colton said.
The county council first proposed a .15% increase in the public safety income tax but officials of the local criminal justice system are urging the adoption of the .3% rate hike.
The officials said the tax increase is needed to adequately fund the Madison County Sheriff's Department and jail, court system and public defender's office.
If approved at .3% it would generate $3 million for the county; $3.6 million for Anderson; $560,000 for Elwood; $364,000 for Alexandria; $237,000 for Pendleton; and $280,000 for the other towns.
Follow Ken de la Bastide on Twitter @KendelaBastide, or call 765-640-4863.