2015 Monroe County Budget Order — Property Tax Rates and Budgets Approved

Monroe County Courthouse at Night
Monroe County Courthouse at Night

Yesterday, Monroe County received its budget order for 2015 from the Indiana Department of Local Government Finance. This means that the Department of Local Government Finance has approved for Monroe County:

  • The budgets for all taxing units (i.e., county, cities and towns, school districts, townships, public library, special units)
  • The property tax levies and tax rates for all taxing units
  • The property tax rates for each taxing district (i.e., the tax rates that actually affect each property owner)

As with last year, the  budget order doesn’t really offer any big surprises. Rates for some taxing districts have gone up slightly, and others have gone down slightly. As in previous years, tax rates in Ellettsville taxing districts are highest in the county (other than the tiny commercial-only piece of Richland Township that is in the City of Bloomington corporate limits). Bloomington tax rates are next, though still substantially lower than those in Ellettsville. Tax rates in the unincorporated areas, not surprisingly, are the lowest, with those in Washington Township still the lowest in Monroe County.

Several weeks ago I produced a chart that shows the overall tax rates for all of our taxing districts along with the individual unit tax rates that make up the overall rate, using 2014 data. I’ll produce a new chart with 2015 data shortly.

The full budget order can be found here: Monroe County 2015 Budget Order

2014 Monroe County Budget Order

Yesterday, Monroe County received its budget order for 2014 from the Indiana Department of Local Government Finance. This means that the Department of Local Government Finance has approved for Monroe County:

  • The budgets for all taxing units
  • The property tax levies and tax rates for all taxing units
  • The property tax rates for each taxing district (i.e., the tax rates that actually affect each property owner)

The budget order doesn’t really offer any big surprises. All tax rates for all taxing districts have gone up slightly. As in previous years, tax rates in Ellettsville taxing districts are highest in the county. Bloomington tax rates are next, though substantially lower than those in Ellettsville. Tax rates in the unincorporated areas, not surprisingly, are the lowest, with those in Washington Township the very lowest in Monroe County.

The full budget order can be found here: Monroe County 2014 Budget Order

Gateway a Useful Tool for Reporting on Local Government Finance

The Indiana Gateway for Government Units — generally just called “Gateway” — is a tool developed in 2010 by a collaboration between the State of Indiana and Indiana University (the Indiana Business Research Center) to make local government financial submissions easily accessible to the public. Local units have been required to use it for the past two years for submission of standard budget documents during the fall budget process.

Although some data has been available to the public since 2011, very recently some major upgrades were released that makes it much easier for local officials and members of the public to retrieve local government financial information. Because Gateway is now to the point where it can actually be useful to members of the public, I though I would bring it to the attention of the readers of MoCoGov.

The Report Builder for Gateway is available at: https://gateway.ifionline.org/report_builder/

The Report Builder provides a number of pre-made reports for all levels of local government — counties, cities and towns, townships, libraries, fire districts,   school districts, solid waste management districts, etc., and the user interface is pretty intuitive.

The following are a couple of reports that might be particularly interesting to taxpayers (along with some instructions for accessing the reports).

  • Employee Compensation (100R)
    • Provides the salaries of all public employees for all levels of local government, state government, public universities, and even public charter schools
    • Choose Employee Compensation (100R) ->  Employee Compensation. Choose your county and then the unit of government within that county. For state and public university employees, choose “State” as your county.
  • Budget Estimate and Tax Rate
    • Provides the information on the Form 4B — sometimes called the “16-line statement” — submitted by local governments for each fund with a tax rate.  Includes the adopted budget, the property tax levy, and the property tax rate for each fund adopted during the fall budget process for the next year.
    • Choose Budgets -> Budget Estimate – Financial Statement – Tax Rate.  Choose your county, year, unit, and fund.
    • For example, see the report for the 2013 Monroe County General Fund below.  You can see, for example, that the general fund budget adopted by the County Council and then certified by the Department of Local Government Finance is $20,300,041, with a property tax levy of $15,097,664, and a tax rate of 0.2389 for every $100 of assessed value.

2013 4B for Monroe County General Fund

  • Budget Summary
    • Provides a summary of budget estimates for each unit of government, for each fund and department, summarized by budget category (i.e., personal services, supplies, services and charges, and capital outlays).
    • Choose Budgets -> Budget Summary
  • Line-Item Budget Estimate
    • Provides a detailed line-by-line budget for each unit of government, for each fund and department.
    • Choose Budgets -> Line-Item Budget Estimate
  • Net Assessed Value by District
    • Provides the net (after exemptions and deductions) assessed value for each taxing district in a county
    • Choose Assessed Value -> Certification of Net Assessed Values by District
    • This report is particularly interesting because it shows not only the assessed value for real property and personal property (i.e., industrial equipment), but also shows the amount of assessed value captured by Tax Increment Finance (TIF) districts for each taxing district.
    • The following screen shot shows the report for Monroe County for 2013

Screen Shot 2013-03-17 at 7.51.05 PM

  • Debt Management
    • Multiple reports that show all debt owed by local government. This set of reports is particularly interesting, because it shows not only the standard property tax-based general obligation bonds (for example, the Showers purchase bond), but also equipment lease-purchases, such as the Vactor and street sweeper trucks purchased by the new Monroe County Stormwater Management Program, and the Innkeeper’s Tax-backed land purchases for the Convention Center
  • Redevelopment Commissions
    • Includes links to all of the annual reports for each of the Redevelopment Commissions in each county. The Redevelopment Commissions are responsible for the TIF districts in each county. The Monroe County Redevelopment Commission annual reports concern the county’s 3 TIF districts, and the Bloomington Redevelopment Commission annual reports concern the City of Bloomington’s 6 TIF districts as well as the City’s Certified Tech Park.
  • Disbursements by Fund and Department Report
    • Shows the actual expenditures (as opposed to the budgeted expenditures) for each fund and department of a local unit of government for a prior year.
    • Choose Annual Financial Report -> Disbursements by Fund and Department. Expenditures are summarized by category (i.e., Personal Expenses, Supplies, Services and Charges, and Capital Outlays).
  • Grants
    • Grants have become an increasingly essential funding mechanism for many aspects of local government. The Grants report shows all of the Federal (including Federal pass-through) grants received by each unit of government during the previous year. Note that this report does not include local grants and grants from non-government foundations.
    • Choose Annual Financial Report -> Grants, and choose the unit of government.

My examples above only scratch the surface of the data available in the new Gateway reports. I encourage everyone interested in local government to give the system a try!

2013 Budget Orders for Monroe County Released – Property Tax Rates for Monroe County

Stinesville City Limit
Stinesville City Limit

Monroe County and other local units of government in the county just received their 2013 budget orders from the Indiana Department of Local Government Finance. This is the official notice of state approval of the budget, property tax levies, and property tax rates for all funds that receive property tax revenues. A look at the property tax rates for each taxing district (area of the county in which tax rates are uniform within the area) shows few surprises:

Taxing District 2012 Rate 2013 Rate Increase (Decrease) % Change
Bloomington City – Richland Township 2.3710 2.2895 (0.0815) -3.44%
Ellettsville – Bean Blossom 2.4539 2.2131 (0.2408) -9.81%
Ellettsville Town 2.4504 2.2100 (0.2404) -9.81%
Bloomington City – Van Buren Township 1.9766 2.0582 0.0816 4.13%
Bloomington City – Perry Township 1.9390 2.0196 0.0806 4.16%
Bloomington City – Bloomington Township 1.9395 2.0194 0.0799 4.12%
Stinesville Town 1.7597 1.6146 (0.1451) -8.25%
Bean Blossom Township 1.6685 1.5393 (0.1292) -7.74%
Richland Township 1.6680 1.5390 (0.1290) -7.73%
Bloomington Township 1.4208 1.4652 0.0444 3.13%
Van Buren Township 1.3719 1.4180 0.0461 3.36%
Polk Township 1.3944 1.4060 0.0116 0.83%
Clear Creek Township 1.3016 1.3393 0.0377 2.90%
Perry Township 1.2695 1.3073 0.0378 2.98%
Salt Creek Township 1.3506 1.2318 (0.1188) -8.80%
Indian Creek Township 1.2017 1.2293 0.0276 2.30%
Benton Township 1.1679 1.2194 0.0515 4.41%
Washington Township 1.1583 1.1929 0.0346 2.99%

The district with the highest rate is the tiny area of Richland Township within the corporate limits of the City of Bloomington. This is a small, all-commercial district, and is atypically high, for that reason. Of the districts that include residential properties, the two Ellettsville districts have the highest tax rates, followed by the Bloomington districts and then the tiny Stinesville district. After that are the unincorporated areas of the county, with Washington Township showing the lowest rates. As I have mentioned before,  it is to be expected that taxing districts that include a municipality will have higher tax rates than those outside of a municipality, because the municipal districts will include all of the tax rates of the township that the district is in PLUS the tax rate for the municipality.

The other thing of note in the data is that, although some rates increased and some decreased from 2012 to 2013, the decreases far outpaced the increases. This is typical of a community that is growing steadily (adding assessed value) but not taking on substantial new debt or receiving excess levies. The substantial (8.8%) decrease in the Salt Creek Township tax rate was also an anomaly; a dispute between the township and the City of Bloomington Fire Department, which provides fire protection caused no fire protection tax rate to be assessed in 2011. 2012’s tax rate included both 2011 and 2012 fire protection services, so 2012’s rate for Salt Creek Township was artificially high. 2013 saw a return to a more typical tax rate for the district.

The full Monroe County 2013 Budget Order is available here: Monroe County 2013 Budget Order

2013 COIT Distributions Available

Each fall, usually just before or during budget hearings, the Indiana Department of Local Government Finance (DLGF) announces the distribution of income tax revenues for the following year to each unit of local government in the County. This week, the COIT distributions for 2013 were released (the report for all units of government in the state is available here). These are income tax receipts that were collected between July 2011 and June 2012 by the state, and will then be distributed to each unit of government in Monroe County over 12 approximately equal monthly payments in 2013.

The page that shows these distributions is available here: Monroe County 2013 COIT Distribution.

Income taxes are collected at-large from individuals (not corporations — there is no local corporate tax in Indiana), and are then distributed to local units of government (the county, the three incorporated cities and towns, townships, the public library, Bloomington Transit, and the Perry Clear Creek Fire Protection District. The distribution to each local unit is based on a formula that roughly corresponds to the relative property tax footprint of the unit of government. What is interesting about this method of allocation is that it doesn’t matter where within the county a taxpayer lives — his or her income tax goes into a big pool and is distributed via the aforementioned formula. So a taxpayer in Polk Township could theoretically see his income taxes support the City of Bloomington, and a resident of Ellettsville could see her income taxes support the Perry Clear Creek Fire Protection District, etc.

For now, here are the COIT distributions for Monroe County for 2013.  Tomorrow I’ll provide some additional comparisons to past years,  and some interpretation of what the numbers mean.

Unit Name 2013 2013 %
Monroe County  $9,663,002 40.1%
Bean Blossom Township  $37,378 0.2%
Benton Township  $51,404 0.2%
Bloomington Township  $403,439 1.7%
Clear Creek Township  $61,958 0.3%
Indian Creek Township  $23,879 0.1%
Perry Township  $187,840 0.8%
Polk Township  $15,561 0.1%
Richland Township  $219,758 0.9%
Salt Creek Township  $19,556 0.1%
Van Buren Township  $418,035 1.7%
Washington Township  $23,625 0.1%
Bloomington Civil City  $9,440,104 39.1%
Ellettsville Civil Town  $567,758 2.4%
Stinesvill Civil Town  $2,718 0.0%
Monroe County Public Library  $2,075,631 8.6%
Bloomington Transportation  $389,105 1.6%
Perry-Clear Creek Fire Protection  $515,177 2.1%
Total  $24,115,928

This means that Monroe County Government, for example, will receive $9,663,002 in income tax over 2013, in 12 approximately equal monthly payments. This is greater than we had been projecting based on past experiences. I will explain why the change in a future blog posting. But in any case, it is very good news for those of us who have to pass a budget for Monroe County Government for 2013!

State Pushes New Accounting Mandate on Counties for Income Tax Revenues

Monroe County Courthouse in the Fall

New Mandate from the State

This week, the Monroe County Auditor’s Office (along with every other auditor’s office in the state) received the following memorandum from the Indiana State Board of Accounts and the Department of Local Government Finance: DLGF Memo 24 July 2012 RE COIT Fund.

The relevant part of this memorandum states:

Implementation of the uniform county chart of accounts has brought to light that counties have been commingling income tax certified shares and distributive shares with property tax dollars. This practice fails to provide accountability for each of these revenue streams and any remaining balances. In order to avoid creating shortfalls in these commingled funds State Board of Accounts (SBOA) did not ask for change in 2012 but we are looking to improve the uniform accounting system in 2013 and beyond.

Beginning in 2013, the SBOA is instructing all county units to use funds, 1110, CAGIT County Certified Shares or 1121, COlT County Distributive Shares, as applicable, to receipt, disburse and account for balances of county income tax dollars not otherwise designated for special legislation or property tax relief. Planning and budgeting for this change is necessary during the 2013 budget process. Please enter these funds as new “home rule” funds in Gateway.

These new funds are separate income tax revenues for the purpose of fixing the county budget and may be used for any allowable governmental purpose. Salaries, fringe benefits, capital expenses are all appropriate uses of these funds. Income tax, however, is the only revenue source for the fund.

Two General Funds?

To understand why this is an issue, consider the way that most counties (including Monroe County) budget for their basic operations. There is a general fund that funds most basic functions of local government — law enforcement, record-keeping, tax collections, justice, etc. Highway funding is already separate, by statute. Revenues flow into this general fund from multiple sources — property taxes, excise taxes, income taxes, fees for service (such as building, planning, and recording fees), etc., and are then expended out of the general fund for the operations of county government, as appropriated by the County Council. This provides maximum flexibility for the County Council to express the priorities of the community in the county general fund budget.

This memo, however, is instructing counties to start segregating out the income tax revenues from all of the other revenue sources that flow into County General into a completely separate fund, and then budgeting for county expenses out of this fund as well. This essentially requires the creation of a second general fund — but without any clear policy distinction between the two (since at this point, property tax, income tax, and other miscellaneous revenues can be expended for any legal expense of county government).

In principle this new mandate from the state should make absolutely no difference. It neither increases nor decreases the amount of revenue available for county government, nor does it in any way restrict the way in which revenues are expended. What it does, however, is create, at the last minute (with respect to budget hearings) a significant budgeting challenge without any public policy benefit. Counties now have to decide arbitrarily which expenses to pay out of the regular old general fund (property tax plus other miscellaneous revenues) vs. which expenses to pay out of the new income tax general fund. Additional monitoring will be required throughout the year to ensure that one of the two general funds doesn’t accumulate a surplus while the other runs a deficit.

How to Slice Apart the General Fund

Since this mandate was just released, no approaches have yet been proven out.  However, different, counties are discussing different approaches. Some counties are considering segregating the income tax fund by function — in particular, by putting so-called “public safety” expenses in the new income tax fund, leaving the rest of county government expenses in the old general fund. I strongly oppose this approach, first, because it sets “public safety” (however that is defined) apart from and above other functions of county government, and second because it creates the temptation for a public safety entitlement if the income tax general fund winds up in surplus.

Another possible approach is to segregate expenses by category — for example, to put all supplies, services, and capital items in the income tax fund while paying personnel out of the old general fund. Paying personnel out of any fund creates particular cash flow problems — payroll may be required before the income tax is received, for example, and so the county would need to “seed” the new fund with money that would be available January 1, 2013, if payroll were to be made out of the fund (we probably want to seed the fund anyway, so that expenditures can be made January 1, but it becomes less urgent if the budgeted expenses are non-personnel).  I prefer this approach, although the fund will probably wind up in surplus, since the total of the county’s supply, services, and capital item expenditures in the general fund. This kind of approach, though, avoids setting up an entitlement mentality for certain essential county government functions over others.

Process Over Substance

In summary, while counties can certainly figure out ways to work with this mandate, it puts additional burden and complexity on the budget process with absolutely no additional public benefit. There is no more control over expenditures. No more transparency. No more accountability. This is simply process over substance. And the problem can be fixed by the General Assembly next session; the General Assembly can simply specify that income tax revenues should be distributed into the general fund.