Christopher Bartels
Columbus City Council voted 6-0 to table the first reading of an ordinance that would affect a slight increase of one of the city’s tax rates.
City officials said most taxpayers wouldn’t notice much of a difference in their bill, but several council members expressed apprehension at any raise in taxes given concerns about inflation and prices.
Two council members—Jerone Wood and Grace Kestler— were not present, and a third, Elaine Hilber, attended online but was unable to vote due to a rule that prevents members from voting virtually on a tax increase.
City officials are proposing that the cumulative capital development fund be re-established, with a rate set at $0.05 per $100 of assessed value, the maximum allowable by state law.
The fund, originally established in 1984, can be used for a variety of purchases, but “is primarily used to fund capital for our police and fire and has been a significant help in providing equipment needed by our public safety members,” City Controller Regina McIntyre told council members.
Increasing the rate would provide for approximately $175,000 in funds per year “to allow for more capital investments in public safety,” according to McIntyre.
In 2024, McIntyre said the city used $2.1 million “for public safety capital out of this fund” and in the previous three years it was “around $1.2 to $1.4 (million) total.”
“We did dig into the reserves for this year’s budget out of this CCD fund in order to fund more needs,” McIntyre told the council. “The fund has been heavily used year to year, and it’s not necessarily one of those funds that’s growing, there’s definitely demand every year that is very healthy demand and continues to grow as equipment and such gets more expensive.”
Mayor Mary Ferdon said the city received $19 to $20 million worth of capital requests last year and “funded about $12 (million),” through a variety of means including CCD.
The new rate would be levied beginning in 2025, according to a notice from the city. The rate had sat at $0.0465 per $100 of assessed value for the previous three years.
According to McIntyre, the increase would have a limited impact on taxpayers. She said there are three types of taxpayers in Indiana— one’s with a 1% cap on their property taxes, another with a 2% cap and another group with a 3% cap.
Those with the 1% cap, McIntyre described as average homeowners.
“Those with the 1% cap are typical homeowners with a homestead deduction and supplemental deductions, those folks will not be impacted for the most part. Because of the cap, it does not exceed the current tax rate. And so by increasing this rate on this fund, it has virtually no impact. There are a few of those homeowners, the impact is $2 a year.”
The 2% group includes “most of our rental properties,” McIntyre said.
“That group is not impacted whatsoever, because again, the rate is above that 2% cap. And so any changes to the rate will not impact the property tax.”
However, the 3% group, consisting of commercial and industrial entities will be impacted, according to McIntyre.
“For example, a company with a $20 million assessed value currently pays about $500,000 annually in property tax, the impact of re-establishing the rate to this fund would increase that by $700,” McIntyre said. “So fairly minimal in the grand scheme of how much they’re already paying, but I did want to share that because I know whenever you talk about property tax rates, that is usually the biggest concern— how is that going to impact our taxpayers.”
City Council has frequently voted to re-establish the rate in the past, most recently in 2022, although Council President Frank Miller said the raise then didn’t actually occur “because of the rule changes that were going on at the time,” referring to legislation that amended the process for establishing or re-establishing cumulative funds.
McIntyre said the rate would often shrink, necessitating another vote to re-establish the fund again to raise the rate back. Changes made in 2022 to Ind. Code § 6-1.1-41 ensure the rate will no longer fall in the future, so if council does decide to raise the rate, it would be the final time they would have to do so, McIntyre said.
Several members said they still haven’t received a good explanation as to why the rate shrinkage occurred in the first place and had additional questions they wanted answered before moving forward.
Council member Chris Bartels asked about what category apartment complexes would fall into and McIntyre said rental properties, or the 2% group. Bartels inquired whether that could change depending on the number of units they have.
“I don’t believe so, I mean there’s just three categories. So to my knowledge, there’s not any more complexity to it than that,” McIntyre said.
“We’ve talked about residents and homeowners and tenants, but we haven’t talked about commercial tenants, landlords and their huge lack of occupancy, especially in certain areas in commercial like office space,” Bartels said. “They’ve been hit, not just here but all over the nation, but those people are struggling as well.”
Council Member Tom Dell said the small amount of increases are “justified based on the fact that we use those additional funds for public safety people, to give them the necessary equipment that they need, in order to provide the services to the citizens.”
In 2022, Miller said he voted no on the first reading and yes on the second “because there were some questions between the first and second readings” back then as well. This time around he expressed concern about raising the rate due to inflation.
“And when we are looking at lower income homeowners, it might only be a couple of dollars. But then we’re looking at the rental properties getting hit with an increase, that’s going to get passed directly to the renters that are paying rent,” according to Miller. “Right now, I’m having a little bit of a struggle with this.”
Dell responded that rental properties wouldn’t be impacted at all, noting the majority of the impact is almost all on industrial and commercial.
Council Member Josh Burnett wondered if there were other avenues the city could use to derive that $175,000 and asked if the money in the fund could be earmarked specifically for public safety.
“I’d feel good about that knowing that it’s going directly to services that citizens need,” Burnett said. “Because I’m not concerned about the optics of a tax increase as much as those funds, people understand where they’re going to, because I know that this community values public safety.”
Miller pointed out the city’s tax rate in the previous two years are the lowest since 2012 at 1.089% and 1.0955%, respectively.
“That’s why I’m sitting here talking about our tax rate, but on the other side speaking with forked tongue that do we want to raise .0035 of tax rate?”
Miller also said he, along with Bartels, would like to know “where commercial apartment complexes fall, that they are commercial or are they rentals?”
Council member Jay Foyst signaled he wasn’t in favor of the increase.
“When people hear the words tax increase it’s like poison to the average homeowner, the average resident. Because that’s all I heard when I was campaigning, what about my property taxes, my property taxes why are they so high?” Foyst said. “… I have a problem with a tax increase with the way things are sitting right now.”
Ferdon acknowledged the inflation issue, saying the price for the types of public safety vehicles the fund would pay for continue to rise as well. As an example, the mayor said the city is on a three-year plan to purchase another piece of fire apparatus that Columbus Fire Department Chief Andy Lay said costs more than $2 million.
“So with inflation, our cost of fire and police vehicles and equipment just continues to go up, and so moving the CCD rate to someplace where we don’t have to deal with it again—it’s money that we’re going to use because we’re going to continue to deal with the cost of those types of vehicles,” Mayor Ferdon said.
However, state law requires the fund to be re-established, and all necessary documents be submitted to the Department of Local Government Finance by May 31 for the new rate to levied in 2025, so rather than shooting down the ordinance, members decided it would be best to put it back on the agenda for their next meeting on May 6 so members could receive additional information from McIntyre and have more council members in person to vote on the matter.
Before the next time council convenes, McIntyre said she would answer council members questions regarding:
- Where commercial apartment buildings fall in the cap percentage categories?
- How is the category determined for those cap percentages?
- Where does the CCD fund balance generally sit?
- What are additional options for deriving that same $175,000 through other means?
The first and second readings for the ordinance to re-establish the CCD fund is set to be on the agenda on May 6 and May 21.
