More LOIT information.
Mythconceptions about LOIT
There seems to be a lot of misinformation or “mythconceptions” being disseminated concerning The Local Option Income Tax (LOIT), so I thought it would be a good idea to debunk some of the most common “mythconceptions”
Mythconception: LOIT (Part B) is a dollar for dollar reduction in property taxes.
Fact: LOIT is much more complicated than this statement would have you believe. The Part B LOIT can be used to recapture or recover property tax revenue, OR it can be used to fund additional property tax reductions per a formula provided by the state. Finally, it could be used for a combination of both so it is patently dishonest to claim that LOIT (Part B) is a dollar for dollar reduction in property taxes.
If the LOIT (Part B) IS used to recapture or recover Property Tax revenue lost due to the property tax caps (this is what I believe will happen), then taxpayers are effectively paying additional Income taxes to fund property tax reductions that already would have occurred due to the property tax caps. In other words tax payers are funding the property tax reductions with the LOIT.
If the LOIT (Part B) IS NOT used to recapture or recover Property Tax revenue lost due to the property tax caps then the City will receive no additional revenue from the LOIT, and there seems to be little purpose for the Part B COIT except to seek out new “Winners and Losers” by using the LOIT money to fund additional property tax reductions for selected property owners based upon the formula provided by the state.
Consider that under either scenario some people may pay more in LOIT taxes than they save due to the Caps and Vice versa, which creates new “Winners and Losers”, and adds further complexity to an already complex contraption.
Mythconception: LOIT (Part C) will be used to recall laid off fire fighters.
Fact: The Mayor of Muncie will determine how the Part C LOIT collected from Muncie residents is spent so there is no guarantee, and in my opinion little likelihood, that the .25% will be used to recall laid off firefighters.
Say NO to LOIT!!!!