When Fishers began formulating the city budget proposals for 2018, officials looked at the amount of income expected and the expense side of the ledger. One source of income to the city is its share of the County Option Income Tax (COIT). The state provides a formula as to how much cities are to receive from that revenue source.
Fishers leaders were surprised to find that the 2018 projected COIT money for Fishers would be $600,000 less than originally expected, while at the same time Carmel is to receive much more. Fishers number-crunchers began to ask – how did this happen?
City Controller Lisa Bradford laid out how this happened Thursday night before the City Council Finance Committee and the answer lies with the City of Carmel property tax rate.
The Carmel rate was fairly steady during the years 2012-2016 at between 67 cents and 70 cents. The rate went up to 83.5 cents in 2016, then went down in 2017 to just under 79 cents.
The COIT distribution formula is based on a “rolling average” of five years.
“When you jump that tax rate up, then your piece of the (COIT) pie, your average gets bigger,” Bradford told the committee. “[Carmel’s] high debt is taking away from us. We have been very conservative by not going with big spikes in [the property tax] rate.”
“Sometimes, you get rewarded for bad behavior,” Councilman and Finance Committee member John Weingardt said about the Carmel debt load.