FORT WAYNE – The increase in local income taxes approved in June has made a big increase in the city budget proposed for 2014 with only a tiny increase in property taxes.
City Council members earlier this year approved increasing the Local Option Income Tax from 1 percent to 1.35 percent. The measure designates 0.25 percent for property tax relief, which will add a new credit to every property owner’s tax bill, and 0.10 percent to public safety, which will send new revenue to every taxing body in the county that provides public safety, including the city, county and some towns and townships.
The property tax relief portion will also, thanks to complicated tax calculations, result in more property tax revenue for entities such as schools and the library.
That credit on property tax bills will offset the property tax hikes the city is planning, including taking the maximum increase allowed by the state, plus the increases allowed in past years but not taken. There is also a new property tax, called the Cumulative Capital Development Fund.
Assuming the tax package is approved by the City Council, despite all of those increases, the owner of a $100,000 home in the city limits is expected to see the city portion of his or her property tax bill increase about $12, or a dollar a month. Because of property tax caps, the owner of a $150,000 house will see his or her bill go up about $2 a year; the owner of a $50,000 house will see about a $4-a-year increase, officials estimated.
The total budget proposed is $147 million, up from $136 million for 2013. The increase, officials said, is all because of the hike in spending on streets, roads, parks and police and fire made possible by the income tax hike.
For more on this storym see Friday’s print edition of The Journal Gazette or visit www.journalgazette.net after 3 a.m. Friday.