Page last updated on August 25, 2022 at 6:06 pm
Introduction
The City of Bloomington faces a pivotal moment. Coming out of the pandemic we can meet that moment and lead our community forward. If we don’t, we risk shortchanging programs and services on which our residents rely.
Since 2016, together we have made great progress in our City in providing excellent essential services and improving opportunities for our residents. We are the only city in Indiana with a nationally accredited police force and a top-ranked fire department (ISO 1). We have seen unprecedented private investment and public infrastructure progress. Our jobs and wage rates are increasing. We’ve made real progress toward more affordable housing and climate action.
For the 2023 City budget and beyond, the City needs additional revenue to appropriately fund continued progress, specifically for investments in:
- Public safety, including newly-negotiated Police salaries, future Fire Department salary negotiations, continued innovation of service delivery, and building replacements and upgrades
- Climate change preparedness and mitigation to enhance public transit and advance goals set in the Climate Action Plan (CAP)
- Equity and quality of life for all, including access to housing, good jobs, local food, the arts, and economic stability
- Essential city services, to maintain assets and assure ongoing excellence
“These investments are crucially important to our community,” said Mayor John Hamilton. “We haven’t had a general increase in our LIT for 30 years, during which time our needs have grown substantially and our challenges have mounted. We have more parks and sidewalks now. We have more residents and more employers. We face a climate emergency. Our residents need more affordable housing. New revenue will fund our continued recovery from the pandemic and recession, to assure Bloomington helps people thrive, whatever their station in life.”
This page outlines a range and scope of critical investments needed to move Bloomington ahead – sustainably, inclusively, and efficiently. These investments embody the values of our community and help ensure that City government can address the challenges of our time. We offer this proposal for discussion and consideration by Council and look forward to working together to finalize it.
Local Revenue Options
Difficult times persist for many in our community, who are managing ongoing impacts of the pandemic and who face availability and cost pressures with housing, health care, child care, transportation, education, and other basic needs. The climate emergency has not abated during the past two years and looms ever larger in our lives. City government has an essential role to play in helping address these challenges and opportunities locally, and it takes revenue to deliver services. The Administration first highlighted the need for new revenue in January 2020. Recent one-time federal pandemic recovery funding has been essential to bridging our gaps, but it is not ongoing, and we cannot rely on federal or state funding to meet key ongoing local challenges.
As discussed with Council during the 2022 budget cycle, the Administration is proposing an increase to the Monroe County Local Income Tax (LIT) rate and the issuance of two $5 million general obligation (G.O.) bonds on a five-year cycle. This combination offers practical, complementary tools: a LIT increase supports annual funding for ongoing programs and initiatives, including personnel; G.O. bonds efficiently fund infrastructure improvements project by project.
We would use these tools to fund proposed investments that emerged from consultations with members of the City Council and city residents, other partners and local institutions, members of the Monroe County Council and Commissioners, Ellettsville Town Council, and other interested parties. The proposed investments also reflect the priorities and goals of Bloomington embodied in many plans and documents, including the Climate Action Plan, Transportation Plan, Parks Master Plan, Sustainability Action Plan, Comprehensive Plan, Housing Study, Plan to Advance Racial Equity, Wage Growth Taskforce, City Surveys, and more. We look forward to continued refinements of this proposal through discussions with all interested parties, and robust public feedback, in the coming weeks.
The Administration will continue rigorous efforts to reduce expenses and contain costs through innovation and reform. Recent examples include:
- Major solar installations that reduce energy costs: Parks saving $50,000 annually
- Using smaller, quick response vehicles instead of large engines: Fire saving $1,200,000 in vehicle replacement costs
- Sanitation system reform and automation:
- Eliminates the need to fill one position: the total savings of leaving the position unfilled fluctuates yearly based on other variables such as landfill fees and recycling processing costs
- From 2020 to 2021, workers compensation costs at the City decreased a total 28%
- Street crews adjusting work shifts to improve paving efficiencies
- Innovations in the leaf collection system: saving $200,000 annually thus far
The list of needed investments demands additional revenue. Two questions pertain: what does it cost to do it? And what does it cost NOT to do it? Our needs are urgent and fundamental. Appropriate investments will continue Bloomington on a positive trajectory and offer true opportunity for all. Lack of investment would diminish our future and shortchange our residents. Indeed, not raising revenue would mean we could not meet negotiated salaries for our police officers or planned investments in climate mitigation. It would mean significant reductions in existing programs and personnel resources.
On the question of whether we have the capacity to raise additional local revenue responsibly, the answer is yes: We are at present a very low-tax city. Indiana is a relatively low-tax state, and among Indiana’s 20 largest cities (excluding Indianapolis/Marion County), Bloomington is in the lowest quartile of both property and local income tax rates. Considering combined rates, we are nearly at the very bottom (Click here for graph). We have the lowest LIT rate among our seven contiguous counties, and we sit in the bottom quartile statewide (Click here for graph).
We are also low comparatively when it comes to government expenditures, revealing the capacity for responsible growth. Looking at per-capita annual spending from city general funds, Bloomington ranks 14th among Indiana’s 20 largest cities (excluding Indianapolis/Marion County). Our $624 per capita annual spending is 16% below the median of $742 (Click here for graph).
In addition, recent trends suggest that Bloomington wages have accelerated over the past several years, surpassing several comparable Indiana cities and growing more in line with national wage growth trends. We have caught up to the state average, and are one of only 11 counties in the state with average weekly wages above $1,000.
Reviewing our per capita overall debt levels indicates significant capacity for additional debt investment. Looking at the public debt per capita of the 20 largest Class 2 cities in Indiana, Bloomington sits right in the middle, ranking 10th with a debt-per-capita of $2,931. After issuing $10,000,000 of additional G.O. bonds, the City will remain in 10th position, with an estimated per capita level of $3,057. (Click here for graph).
Specifically, our capacity to issue general obligation bonds (G.O. bonds) is strong: G.O. bonds have a statutory limit of 2% of adjusted net assessed value. Using this calculation, the City has an overall G.O. bonding capacity of approximately $28,000,000–which will grow over time with assessed value. Subtracting our outstanding debt of approximately $10,000,000, we retain a G.O. bonding capacity of approximately $18,000,000. With approval of the current G.O. bond proposal of $5,000,000, the City would retain approximately 46% of its current capacity. (Click here for graph).
The Parks department has authority to issue separate debt, and has outstanding Parks G.O. bond debt of $14,805,000 and total outstanding debt of $18,130,000. There is no statutory limit on Parks G.O. debt. (Click here for graph).
Proposal
Mayor John Hamilton will ask the Bloomington Common Council to implement an increase to the Monroe County Local Income Tax (LIT) by 0.855% for the purposes of economic development and to adopt two $5 million general obligation (G.O.) bonds to invest in local infrastructure. Mayor Hamilton presented the proposed increase and bonds to the Council at their regular session on April 6, 2022. The full video, transcript and slides are available at the link below.
The proposed rate increase is part of Mayor Hamilton’s New Revenue Package shared with the City Council on March 16 (see link below), designed to make critical investments in public safety, climate mitigation and resilience, equity and quality of living, and essential city services that will move Bloomington ahead – sustainably, inclusively, and efficiently.
Council members will receive materials related to the request on April 8, for their April 13 committee meeting, including the draft resolutions, a memorandum providing the reasons for enacting the LIT increase, information on the LIT process and the proposed change, and a list of investments. Click here for the packet submitted to Council. The packet to Council will also include draft ordinances and a list of investments for the two $5 million general obligation bonds. The full packet and agenda for the City Council meetings are available online at bloomington.in.gov/council.
The council will meet and discuss the proposed legislation on April 13 and further discussion and vote, including a second reading of the bond ordinances, will be held at the April 20 City Council regular session meeting. Residents are invited to provide public comment at the April 13th and April 20th meetings.
The proposed local income tax increase distribution would be based on population, with shares of the revenue being allocated to the City of Bloomington, Monroe County, the Town of Ellettsville, and the Town of Stinesville.
Proposed LIT and G.O. Bond Investments
Mayor Hamilton shared a memo about the new revenue proposal to City Council on March 16. Click here to read the full proposal–Revised March 18, 2022.
Updates
May 5, 2022: City Council Unanimously Approves Local Income Tax Increase, Supporting Major New Investments in Bloomington’s Future–Click here.
April 26, 2022: Herald Times Mayor's Corner: Addressing Fiscal Transparency and Public Infrastructure Investments–Click here.
April 22, 2022: City Council Approves Two $5 Million Infrastructure Bonds; Final Local Income Tax Vote Moved to April 27–Click here.
April 20, 2022: Mayor Hamilton's New Revenue Remarks to City Council–Click here for the video and transcript.
April 13, 2022: Mayor Hamilton's New Revenue Remarks to City Council–Click here for the video, transcript, and a copy of the slides.
April 13, 2022: Staff Share Remarks & Slides on Proposed G.O. Bond Investments at April 13 City Council Meeting –Click here for the slides and click here for the video.
April 8, 2022: Memo and Packet Submitted to City Council for April 13 Meeting–Click here.
April 6, 2022: Mayor Hamilton's New Revenue Remarks to City Council–Click here for the video, transcript, and a copy of the slides.
April 6, 2022: Press Release–City Council to Consider Local Income Tax Increase, Two Bonds–Click here.
March 17, 2022: Mayor Hamilton shares a short video message about the new revenue proposal–Click here for the video and transcript.
Timeline
March 16, 2022: New revenue proposal sent to City Council
March 17, 2022: New revenue proposal shared with residents
April 6, 2022: Presentation by Mayor Hamilton to City Council
April 13, 2022: Discussion of revenue legislation at City Council meeting
April 20, 2022: Second reading and discussion at City Council meeting
April 27, 2022: Discussion at City Council Special Session meeting
May 4, 2022: Discussion and vote at City Council meeting
The agenda, minutes, and packet for City Council meetings are available online at bloomington.in.gov/council.
Frequently Asked Questions
Click here to read the Frequently Asked Questions. As details are developed, this document will be updated. Revised April 28, 2022.
Feedback
We want to hear from you. Please use the online form at https://forms.gle/ciEx78F7HgYTNie29 to provide your comments about the proposed new City revenue. You may also share your comments with the City at mayor@bloomington.in.gov or 812-349-3406. Participate in a public poll by visiting https://polco.us/n/res/vote/bloomington-in/city-of-bloomington-2022.