County council OKs income tax hike for jail

Workers who live in the county will have more money taken out of their paychecks starting this fall now that the county has passed an income tax to generate money to pay for a multi-million dollar jail expansion.

The Johnson County Council gave the final OK for an income tax increase to pay for a $20 to $25 million jail expansion that would add 250 beds on the sheriff’s office campus in Franklin.

The council voted 7-0 to pass the tax on Friday, after two members of the public opposed the tax and one member of the public spoke in support of it.

The increase will bring the county’s income tax rate to 1.2 percent on Oct. 1, when the tax begins. Johnson County residents who work currently pay a 1 percent income tax.

[sc:text-divider text-divider-title=”Story continues below gallery” ]

Residents who receive Social Security income would not see an increase, because that income is exempt from the local income tax.

A person who makes $75,000 annually will pay about $150 more per year, according to estimates provided by Rob Henderson, a county council member. 

All county residents with an income subjected to the income tax will pay the increased rate. If you work in Johnson County but live in another county, the income tax rate you pay is based on your county of principal residence as of Jan. 1 of each year.

The increase is expected to bring in about $9 million annually, which will pay for the jail expansion that is expected to cost between $20 and $25 million dollars, according to the latest estimate.  The expansion is in the beginning stages of planning, so an exact cost is not known, although the estimate has gradually grown as officials have begun the process of planning the expansion.

The current jail is chronically overcrowded and the state has ordered the county to fix the issue, which is why multiple council members said they needed to pass the tax.

Johnson County has the lowest income tax in the region, even with the tax increase, and the county is at the point that they must collect the tax to solve the issue, Henderson said.

"There is not a soul in this room that wants this tax to go through. But we do not have the luxury of not meeting mandates, not meeting minimum requirements. We have not met minimum requirements for years. This is us catching up,"  he said.

Not passing the tax would be irresponsible, given that the jail is chronically overcrowded, which also puts jail workers at risk, said Jonathan Myers, a council member.

Commissioner Kevin Walls formed a committee of county and law enforcement officials to study dozens of options on how to fix the overcrowded jail, at the direction of the state.

A jail feasibility study released this spring detailed the other options, which included housing inmates elsewhere and creating a regional jail. These other options were too costly and logistically not feasible, county officials have said. 

The last jail expansion was in 2001.

The 2001 expansion was a $9.5 million project that increased the capacity to more than 300 beds from 104. The work was the result of a settlement that was reached after the county was sued by the Indiana Civil Liberties Union in 1997 alleging poor conditions at the jail.

By 2005, county officials were already exploring a more permanent solution to ongoing overcrowding. But voters rejected a property tax increase in 2010 to pay for a 400-bed expansion that would have cost about $23 million.

Now, the county must address the issue or risk further government involvement, council member James Ison said.

"If we don’t do it on our own, federal courts will tell us how to do it and that will be quite a bit more expensive than the option we have chosen," Ison said.

The county was under deadline to get a tax passed; the first reading of the tax was early last week. Details of the tax were unveiled in a county council meeting in early April.

State law changes on July 1, and will limit what portion of the new tax revenue can be spent on jail operations. Approving the tax now under the current law gives the county greater flexibility in setting aside the right amount of the tax to pay for the day-to-day expenses once the expansion opens.

In future years, the money could be used for other correctional facilities, such as community corrections. The tax will be in effect for 20 years, but the plan is for the rate to drop to .1 percent in 2023 once the debt is paid off, although the current county council cannot make such stipulations for the money, according to the Department of Local Government Finance.

Two men spoke against the tax increase during the public meeting. The tax increase is not popular, and citizens do not appreciate being taxed further and the tax likely would not pass a popular vote, Damian Stanziano said.

Richard Riley asked council members if they had tried bail reform before a jail expansion.

Franklin resident Jim Curry spoke in favor of the tax as a measure to meet mandates, which require that jail inmates, some of whom have not been convicted of a crime, be safe and comfortable in a jail that is not overcrowded.

Johnson County workers are likely facing an additional income tax later this year, as the county council is also considering income taxes to help pay for about $110 million dollars in road and bridge work, mostly in preparation for increased traffic after Interstate 69 is built through the county.

[sc:pullout-title pullout-title=”At a glance” ][sc:pullout-text-begin]

A local income tax increase has been approved to pay for the construction and operation of a jail expansion.

The increase would take effect in October. Here is what the increase from a 1 percent to a 1.2 percent income tax would cost county residents, depending on your salary:

$30,000: $60

$50,000: $100

$75,000: $150

$100,000: $200

$150,000: $300

$175,000: $350