Monday, August 09, 2010
Marion County Income Tax Revenues To Fall Nearly $50 Million Next Year
The City of Indianapolis will be hit hard be a reduction in state income taxes. State distributions for the CAGIT and COIT local income taxes are expected to be 16% less next year due to declining tax receipts. That will amount to $50 million in fewer revenues. The City's controller earlier said the City would collect as much as $30 million in fewer revenues as a result of dropped income tax receipts. Because state distribution of taxes collected lags by one year, the budget crunch that has already hit the State of Indiana will hit local governments which are dependent on local income and sales taxes for revenues starting with the 2011 budget. Statewide, counties are expected to collect $250 million less in local income taxes next year than it receives this year. The City has already claimed it will receive $20 million less in property tax revenues as a result of the property tax cap law. Suffice it to say the City is going to face severe budget cuts in order to fund basic services without another tax increase.