Goshen News, Goshen, IN

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January 15, 2013

Mayor, commissioners support Culver bill

Legislation involve income tax monies

GOSHEN — Elkhart County Commissioners Monday pledged to support a locally-sponsored legislative bill, that if approved, could cause significantly more Local Option Income Tax revenue being returned to county and city coffers.

Goshen Mayor Allan Kauffman went before the commissioners Monday to seek written support for the bill, which is being sponsored by Indiana State Rep. Wes Culver, R-Elkhart County, at the request of Kauffman.

According to Kauffman, the bill, which has yet to be named, focuses specifically on the tracking, collection and distribution of LOIT. Indiana first allowed local governments to use income taxes in 1974. Since then, many new local income tax options have been authorized, such as the County Adjusted Gross Income Tax (CAGIT), County Option Income Tax (COIT) and County Economic Development Income Tax (EDIT).

“I served on a state committee with the auditor of Allen County, Tera Klutz,” Kauffman said. “We were assigned to look at all taxes that the state collects and distributes because of the snafu that happened in the last couple of years with distributions.

“So we tracked all of the hoops that all of these revenues go through after collection and before distribution, and the most troubling for Tera and I was LOIT. That was the first one we discussed — and these meetings went on for six months — and the last one we discussed, because it seemed to be the most difficult to work with.”

At the committee’s first meeting, Kauffman said he asked the head of the Indiana Department of Revenue if they keep track of the information employers send, including where their employees live, the counties they live in, how much of the withholdings are from each county, etc.

“I thought the answer was going to be yes, and the answer was no,” Kauffman said. “It’s all lumped in with state income tax, and just dumped into the general fund, and then when people file their individual tax returns, then they know what counties to send it back to.”

The major problem with that, Kauffman said, is that there are some counties, including Elkhart County, that tend to have a higher proportion of workers who do not file tax returns for whatever reason.

Kauffman learned that there is no way — due to resources, software and other issues — that counties can get the tax money back if residents do not file income tax returns. The money cannot be tracked back under the current system, he said.

“So, everybody in the room, to their credit, said this is a problem,” Kauffman said. “If a dollar comes down from Elkhart County it ought to go back to Elkhart County — but they didn’t know how to fix it. So the report that comes out of the committee is that we know this is a problem, and with the current resources we have, we cannot fix it. That’s basically it.”

In light of those findings, Kauffman said that Culver and several other state legislators have come forward with bills designed to try and fix the funding distribution issue.

“Wes Culver’s bill is one of a few different bills that have been filed,” Kauffman said. “But his bill basically says that the state has to track where the money’s coming from, and it has to distribute the unreconciled cash. If they’re going to continue to work off of individual tax returns, when they figure out how much of this pot of money is unreconciled, they send that back too. So that’s the essence of the bill.”

Following Kauffman’s report, Commissioner Terry Rodino pledged his support to the bill, adding he would have no problem writing a letter of support for the bill that could be used by Culver to help push the bill forward. Commissioners Mike Yoder and Frank Lucchese were quick to agree.

“I have no problem with supporting that,” Rodino said, noting that he also felt it might be good to get a similar letter of support from the Elkhart County Council, to which Kauffman agreed.

“This should be a no-brainer for the council,” Kauffman said.

Tax Sale

In other action, the commissioners approved a resolution setting up a public auction in March for the sale of tax sale certificates for several properties in the county that are delinquent in payment of property taxes.

According to County Attorney R. Gordon Lord, the 14 properties in question are those that have already been offered for tax sale on one or more occasions but have received no bids equal to or in excess of the minimum sales price required by law. Due to this issue, Lord noted that the Elkhart County Board of Commissioners has agreed to sell the properties at auction at a significantly reduced price in an attempt to get the properties back on the tax rolls.

The date for the public auction has currently been set for 10 a.m. March 4.

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