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Indianapolis – Indianapolis City-County Council minority leader Phil Borst is urging the Indiana General Assembly to enact the Indiana Association of Cities and Towns plan called Hometown Matters. Hometown Matters is a detailed bi-partisan plan developed over the last two years by Indiana’s mayors and council members.

The plan calls for property tax cuts, government efficiencies, and new flexible revenues to fund local government. The funding of cities and towns is not a one size fits all approach. Hometown Matters helps cities large and small.

Time is running out for this legislative session to provide meaningful long-term property tax relief, and provide the means for adequately funding cities and towns. “Marion County can no longer just continue to raise property taxes and local option income taxes. In addition to more efficiencies, we need a new revenue that will grow at 5% a year, that 30% is paid by out of area people that come for conventions, sporting events, shopping, etc., and solves our public safety funding needs.” says Borst.

The much needed new revenue could be a regional sales tax. For the last two years, Borst has advocated a regional sales tax to help all nine area counties fund local government, to cut property taxes, and to fund regional needs such a mass transit and economic development.

Under Borst’s plan, an average Marion County resident’s total taxes paid would go down. The average family would pay some $38 more with a one percent increase in sales tax; however, the average $100,000 home would save about $160 in property taxes. With more government efficiencies and the sales tax revenue, Indianapolis could also solve the many pressing public safety needs such a police and fire pensions, the funding of police and fire departments, courts, prosecutors, public defenders, the crime lab, jail beds, a new criminal justice complex, and faith based initiatives proposed by local clergy. The projected additional $10M needed to fund the operation of Lucas Oil Stadium and the expanded convention center would be provided under Borst’s plan.

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SUMMARY OF BORST COMPREHENSIVE FUNDING PLAN

USING APPROXIMATE FIGURES

• 1% regional sales tax in nine county area could raise some $250M
• 30% is paid by out of area people that are visitors for conventions, sporting

events, shopping, vacations, etc.

• Regional funding of mass transit using 8% or $20M
• Regional funding of economic development using 2% or $5M
• Do not tax food and beverage since already 2% is collected. Need to subtract $22M from the $250
• Would leave a net amount of $203M to be divided among the nine counties by the percent collected in each county: Boone 1.6% or $3.24M, Hamilton 17.5% or $35.52M, Hancock 2.8% or $5.68M, Hendricks 7.7% or $15.63M, Johnson 7.1% or $14.41M, Madison 6.2% or $12.58M, Marion 54.9% or $111.45M, Morgan 1.1% or $2.23M, Shelby 1.2% or $2.43M.
• In Marion County property tax cuts of $135M consisting of $28M from sales tax revenue, state takes over Boys/Girls School of $6M, and $101M welfare funding
• An average Marion County family income is $42,000. If ten percent of the income is discretionary, a 1% sales tax increase on $4200 is $42. By not taxing the food and beverage portion or approximately ten percent, the net amount paid by a family is about $38.
• A property tax cut of $135M would equate to some 38.57 cents per $100 as one penny raises about $3.5M county-wide. On a $100,000 home after deducting $45,000 homestead, and $3,000 mortgage credit, 20% homestead credit creates a property tax savings of $160 to the homeowner.
• There is a net total tax savings to a family of some $122
•  Marion County has many pressures on funding vital services especially those that are public safety related. This plan could fund $154M of annual needs in Marion County. The new revenue of $111.45M in sales tax, some $5.55M of efficiencies, and state takeover of welfare and Boys/Girls School funding could fund the following annual needs:

                                  $35.00M for police and fire operating and pensions

                                  $20.00M for county courts, prosecutors, public defenders, jail

                                                  beds, crime lab, probation officers, etc.

                                  $10.00M for yearly payments for a criminal justice building

                                  $ 5.00M  faith based crime programs proposed by local clergy

                                  $22.00M inventory tax loss to prevent property tax increase 

                                  $  6.00M 2% circuit breaker and property tax replacement credit

                                                  cap to prevent property tax increase

                                  $  6.00M for Boy/Girls School DOC payments to state

                                  $31.00M yearly increase in welfare payments to state

                                  $  6.00M for municipal corporations with a property tax rate:

                                                  Library Board, Health and Hospital, and IndyGo

                                  $  3.00M for four excluded cities and townships

                                  $10.00M increased costs to CIB for stadium/convention