BROWNSBURG — The town here is set to explore an unprecedented tax rebate program that would potentially deliver checks to residents after getting state approval that such a practice was legal by use of Economic Development Income Tax (EDIT) funds.
By a three to two informal vote at Thursday’s town council meeting, the group committed to at least moving forward and exploring the ability, exact numbers, and ramifications of such a decision. Town Manager Grant Kleinhenz noted that this is a one time opportunity, not something that would become a yearly trend.
“(The EDIT funds) are not a property based or levy based tax. The general fund, for instance, is a property tax based levy,” said Kleinhenz. “I don’t want anyone to think the money we receive is not necessary and in any given year we might have 20 projects through the town of Brownsburg, but we might not be successful in all 20 of those projects. Based on what I’ve been able to gather preliminarily, a $100 rebate for our 7,000 to 8,000 residential homes would equate to around $800,000.”
The current EDIT fund sits around $5 million but is varied from year to year, he said. It typically is set aside for economic development or however the government chooses to use it. For instance, Kleinhenz said that part of the EDIT funds went to creating the comprehensive plan.
“There are two income taxes we pay. They’re an aggregate and a portion goes to one fund, and a portion goes to another. The COET (County Option Income Tax) is where you live. The EDIT is where you work. Not all counties have an EDIT tax,” he added.
Opinions were divisive on exploring this option.
“We’re coming in under spending. It’s kind of a perfect storm with some of our other liabilities off the books. Everyone I’ve talked to said the same thing, unanimously ‘yes, I’ll take my money back,’” said Dwayne Sawyer, council president. “If I can take my town council hat off for a second here, if my government said ‘here’s a check for $20,’ I’d take it. It’s my money. It’s my taxes. If we can do it from a financial, legal perspective, and by all accounts the initial flush says we can, the fact is that we’re able to consider this without projects suffering. Roads will still be paved. Streets will still be fixed. We still have economic projects in flight on the books. We just were able to approve another one this year into next year because we’ve saved money. No projects will suffer. Let’s make an informed decision. I’d be whole-hearted and willing to say that it’s incumbent on us if we can do it responsibly, we owe it to our citizens to ask the tough questions.”
Councilman Rob Kendall echoed his sentiments, saying that residents receiving these checks also would be very likely to put some of it back into the business community as another positive trade-off.
“We can use EDIT dollars to issue real money back to the citizens of this community. We talk about ways we can serve our community, and I believe the number one thing the council can do is to empower people, give them their freedom, and let them keep as much of their own money as possible. Everyone I’ve talked to says it’s great, that they want to have their money back. It’s their money. We the government took it from them. I would like to give it back to them.”
There were differing opinions on the dais on this issue. Councilman Dave Richardson said that the people he has spoken with think the payoff of a $50 or $100 check would be minimal in lieu of being able to put it towards other projects in town. Councilman Don Spencer agreed.
“I think as elected officials and stewards of taxpayer money, we’re obligated to do the right thing with their money. I’ve talked to a number of people and I get much the same result (as Richardson). They say to keep the $100 and turn it into something, leverage against this project or that project. We can use these EDIT dollars to leverage to provide this community with something more meaningful I believe than a $50 or $100 check. We have programs and obvious needs in front of us to grow this community and that’s as much what we owe them.”
“I would hate to give that $100 away that could be paid for some other service that the community I think has a right to expect,” added Richardson.
Councilman Gary Hood expressed doubt that after doing the number crunching, it would be fiscally responsible, but did say that it is worth investigating on principle.
“I believe we’re going to find the administrative costs extremely significant relative to the benefit of what ultimately gets done, but I do not have a problem with looking at the numbers. Let’s pull the numbers together at a very high level, a couple hours of investment. Let’s do some high level estimates. What are the issues? What are the risks? Who is going to be upset and decide to bring legal action and all of the sudden we have to defend that? Let’s look at all the pieces of this thing. The question that really comes to my mind is, if we’re going to put $100 back, which is not insignificant, and I think that is in concept a good thing, but what is the cost we’re going to incur?” explained Hood.
Kleinhenz made clear that only a portion of the $5 million EDIT fund would go to these rebates as to still have the opportunity to still be able to encourage economic growth. The desired outcome is to provide the rebate checks to all residential units within the town of Brownsburg, including condominiums and apartments.
“The opportunity cost is less projects, less economic development. We have the money right now. I don’t have a crystal ball though (to see the future),” he said.
Cinda Kelley of the Hendricks County Economic Development Partnership offered the services of a local CPA to investigate this potential groundbreaking decision. She noted that the EDIT tax is a very difficult one to understand.
The next step in this process will come during the next town council meeting on Sept. 27 at 7 p.m. at town hall, where citizens can have the opportunity to stand up during the general public comments and voice their thoughts on the tax rebate if they choose to do so.
“Never think ‘I’m just one person. They’re not going to listen to me,’” said Sawyer about citizen input. “Call. E-mail. Come to meetings. When we get 2 to 3 calls about an issue, we respond.”