A newly created Montgomery County Municipal Strategic Taskforce (MUST) convened Wednesday for the first time. The group is responsible for deciding how future local income tax funds will be distributed beginning in 2029.
The state has asked all counties to form a taskforce with the idea that local governments can be the deciding factor on how local income tax is distributed to municipalities and for emergency services. Townships, libraries, emergency services and each town and city in Indiana will be affected by the upcoming funding changes enacted by state legislators. They did so with the most recent passage of Senate Bill 1. The legislation is an attempt to overhaul property tax laws in the state.
State legislators hope a reduction in real estate taxes will be absorbed by local income tax funds.
MUST members meeting locally include the clerk-treasurer from each county town and the city of Crawfordsville. Montgomery County Councilman Mike Warren is leading the group.
After Montgomery County Administrator Tom Klein welcomed the attendees, he explained the instructions from state legislators. He said the group can play an important role in the future of the county. He reiterated the taskforce needs to develop a strategy to make sure each taxing unit is treated fairly using the new state local income tax laws.
The group met the first request from the state in that it met before Oct. 1. The next deadline is to respond to the Indiana Department of Local Finance with a report by Dec. 1. The report can include any positive or negative comments the local MUST team wants state legislators to know about the process.
All those speaking, including government financial advisors, Mayor Todd Barton and a representative from the Association of Indiana Municipalities all said counties have many hurdles to clear. The first hurdle does not even appear to be for the taskforce but rather for state legislators who must answer the many questions surrounding the LIT rate to be charged to a wage earner. State legislators admit there are changes coming to Senate Bill 1 which could affect the duties of each local taskforce.
The concern is that each Indiana county does not have clarification on how to act on something that likely will change in the next legislative session.
Barton is skeptical about what the state is asking and what the end result could be.
“I believe the state is setting us up to fail,” Barton said. “If we cannot come to a consensus, will the state say you had your chance, now let us take over. We do not want that, but they are not giving us clear direction.”
AIM representative Joe Falmer reported he has attended taskforce meetings in 44 counties. He likened the process as a “dress rehearsal” to what is coming in a year or two considering the distribution of LIT funds. He encouraged the taskforce to submit the December report and tell the state what is right and what is wrong with the new MUST directives and changes in LIT.
At the end of the meeting the taskforce voted to meet in the first quarter of 2027 with hopes they will have better direction from the state. The taskforce also agreed to send a report before Dec. 1 to the DGLF stating they need more information to perform their duties.
Also each municipality is encouraged to send already requested financial information to the county auditor’s office.
