Montgomery County Council members took a major step in paying for the ever-increasing cost of crime.
After discussing the issue and hearing from several elected officials, including Montgomery County Sheriff Mark Casteel and Crawfordsville Mayor Todd Barton, the council voted during a special meeting Monday to shift the distribution of property tax relief credits and increase the local income tax by 0.2 percent.
All county police departments will benefit from the changes as the expected increase in tax revenue will be dedicated to public safety.
For 10 years, homeowners have had the benefit of reduced out-of-pocket property tax payments due to property tax relief credits in the form of the Homestead exemption. Funding the credits comes from the local income tax rate of 2.1 percent. Presently 1.1 percent of the local income tax goes to property tax relief. Out of the total funds available for tax relief, homeowners were receiving an 80 percent reduction in homeowners credit and commercial property owners were receiving a 20 percent tax credit. Beginning in 2018 the split of property tax relief credits will shift to homeowners receiving 60 percent and commercial property owners receiving 40 percent.
The net result will place more funds into county coffers without raising property tax rates.
The council also will enact, for the first time, a public safety tax that will be derived from propety tax relief credits. The rate will be 0.4 percent and funds will be completely dedicated to public safety. All police departments, including town marshals, will see more funds available in 2018.
The increase in the county’s local income tax will take effect Jan. 1, 2018.
Because the property tax rate in Crawfordsville is more than the county rate, the change in the PTRC distributions will affect city homeowners more than those living in the county. County homeowners will see minimal increase in property tax payments while city homeowners will see a larger increase. Commercial property owners will not be significantly affected.