In a bipartisan vote, the Indianapolis City-County Council on Monday night approved a proposal by Mayor Greg Ballard to raise the public-safety income tax by 43 percent, partly to fund additional police recruits.
The public-safety income tax will go from 0.35 percent to 0.5 percent, making Marion County’s total income-tax rate 1.77 percent, effective Jan. 1.
The 0.15 percentage-point hike will cost the typical Marion County household, earning about $42,000, another $5.25 per month.
Ballard, a Republican, proposed the income-tax hike in conjunction with eliminating the homestead tax credit in order to pay for a preschool program that he believes is a step toward long-term crime reduction. The homestead credit provision was stripped from the income-tax proposal in committee and reintroduced as a separate measure, now headed for its own committee hearing at a later date.
An amendment that would have re-joined the two measures failed Monday night. In the final 19-10 vote on the income-tax hike, the dissenters were nine Democrats and one Republican, Christine Scales.
“The City-County Council tonight took action on one piece of my plan to make Indy safer by providing part of the money needed to hire more police officers," Ballard said in a written statement. "It will take more than just hiring additional police to make our city safer; we must address the root causes of crime as well.”
Ballard's office expects the higher income-tax rate to bring in an additional $29 million a year. Of that, $16 million will go to the Indianapolis Department of Public Safety.
With the extra money, the Indianapolis Metropolitan Police Department will take 90 recruits next year and 90 more in 2016, and then 50 in each in the two following years for a total 280 by the end of 2018.
Ballard's office projects IMPD's head count will grow from 1,565 at the end of this year to 1,677 by the end of 2018. That assumes an average of 42 officers will retire each year.
The initial ramp-up in recruits will consume only a fraction of the city's additional public safety revenue. The rest will shore up IMPD's fund balance and cover an ongoing budget deficit that is driven almost entirely by public safety expenses.
Of the projected $29 million, Marion County criminal justice agencies, which include the Marion County Sheriff's Office, will get $11 million, and there will be $1.9 million for other municipalities in the county, according to Ballard's administration.
Ballard said that without the homestead credit elimination, the IMPD staffing plan would be underfunded by $2.5 million a year. His proposal calls for using some of the revenue from eliminating the homestead credit for IMPD, as well as preschool. The homestead credit is a local subsidy that benefits some residential taxpayers whose bills are below the 1-percent cap on property taxes. It is not to be confused with the major homestead deduction, which benefits all residential taxpayers.