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County Income Tax Hike Step Closer To Reality

Panel Endorses Plan, Which Goes To Full Council Monday

POSTED: 9:12 pm EDT July 20, 2007

A City-County Council committee on Friday recommended that the full council pass Mayor Bart Peterson's request to raise the county's income tax from 1 percent to 1.65 percent.

The council's administration and finance committee voted 4-2 to recommend the increase. The full council is expected to hear the proposal on Monday.


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Peterson last month called for the raise, which he said would yield an extra $90 million yearly, most of which would be put toward crime-fighting initiatives. Peterson later said the first three months of revenue from the income tax increase would be used to lower property taxes.

Peterson also said he would refinance the county's debt to the state for child welfare and incarceration. He said the refinancing and income tax revenue would reduce property taxes $75 million over two years -- a temporary bandage to an issue that ultimately, he said, will require state intervention if homeowners are to see permanent relief.

Property taxes have been a hot issue because many homeowners across the state have seen steep increases, especially in Marion County.

On Wednesday, Gov. Mitch Daniels temporarily froze Marion County's property tax bills at 2006 amounts and ordered a reassessment there, saying the most recent assessment favored commercial properties and shifted an unfair portion of the tax burden to homeowners.

If the full City-County Council approves the county income tax increase, a person making $50,000 per year would see his or her monthly income tax payment rise from $41 to $68.


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