Floyd Council members maintain positions on judicial local income tax

Jul. 20—After the Floyd County Council's July 11 public hearing, council members largely are sticking with their stances about a proposed judicial Local Income Tax.

"I've been talking to the various residents in my district and they're pretty much adamantly opposed to this new tax," said councilmember Jim Freiberger who had already voiced his opposition. "I support that idea right now because I think there is a lot of avenues out there of options that we have where we can get that [deficit] down. I think we could actually get to cover that full deficit, if the other council members are willing to come along with me on some of these ideas."

Last week's public hearing brought out several Floyd County residents who said they believed the judicial LIT would be a burden on taxpayers. Some recommended the council examine where it can cut expenses rather than add more new taxes.

The council proposed the judicial LIT in June to address a projected $1.8 million budget shortfall in the county. The tax, levied at 0.07% and projected to cost citizens about $50 per year, would support up to half of the county's judicial salaries.

Freiberger said he is still in opposition to the tax because there are options available for funding that have not been adequately explored and discussed by the council.

The council's rainy day fund had $2,896,982 available for use as of end-of-year 2022, according to a file obtained from the Reedy Group, the council's financial advising team. Freiberger said this money is an additional funding source for budget-related items.

Another $1.1 million is projected to be available in the Riverboat Fund by the end of 2025, according to the document obtained by the Reedy Group. The council can pull $330,000 per year from the fund to offset some of the projected deficit, Freiberger said.

The federal inmate program also brings in funds to the county for each person taken in, which can be rolled into the council's general fund if it chooses. Currently, there are 12 federal inmates in the Floyd County jail, seven of which were taken in recently, Sheriff Steve Bush said. The county receives $27,010 for each inmate annually, so the new inmates are expected to generate an additional $189,070 per year.

Another reason Freiberger said he is not in favor of the tax is because the rate of 0.07% is not locked in — the council could increase it each year if desired. On top of the raising of stormwater rates last December and the cumulative capital development tax approved in May by the Floyd County Commissioners, it's all too much to put on taxpayers, he said.

Councilmember Danny Short, who also was opposed before the public hearing, said he is also still opposed to the tax following the public hearing.

"I received probably a dozen calls and emails, and no one's for it," he said. "My stance hasn't changed."

Short said he feels like the council would be taking the easy way out by implementing the tax, and that the council should defer a year before moving forward with it.

It's also still unclear how far the tax's coverage would go. Short said the council is awaiting the Department of Local Government Finance's ruling about whether the county can levy the tax for probation officers, community corrections and the prosecutor's office.

"When you throw on top that we don't even know if this is going to fund everything that they wanted it to fund, I just don't understand why we're still pushing forward with it when we're solid for another 18 months, at least, if not 24," he said.

Connie Moon, another council member who was opposed before the hearing, also said she believes the council could examine options for increased efficiency using less money before passing the tax.

She said approximately $500,000 rolls over into the council's principal fund from grants given out of the Floyd County Legacy Foundation. This money could serve as another funding source, Moon said.

"I think first we need to dive in and look at those budgets," Moon said. "See if there's anything we can cut, see if there's anything we can change to help with expenses."

Councilmember Dale Bagshaw, who voiced support before the hearing, said he appreciates people coming out to the meetings to share their opinions. He said he still believes the judicial LIT is necessary to avoid a crisis in the future.

"We don't have a crisis today or tomorrow, but in a couple years we're going to have a major crisis unless our revenues go up," he said.

The tax would help avoid having to make cuts in departments such as police and public safety to address losses in revenue.

"Our revenue doesn't meet our expenses," he said. "It's not that the county government is irresponsible and frivolous. There's so many things that we're compelled to do as a local government that we don't have any control over, and we have to fund those things."

Another public hearing will be held July 26 at 6 p.m. at Pine View Government Center in New Albany. Following the hearing, the council will take a vote on the tax during its regular meeting.