The Carmel City Council approved a nearly $131 million budget for 2017, which includes a tax decrease.
Carmel’s city tax rate previously went from 70.07 cents per $100 of assessed property value in 2015 to 83.56 cents per $100 in 2016. For 2017, Carmel Mayor Jim Brainard previously promised that taxes would go down but disagreed with some city councilors on how much.
City Councilor Sue Finkam said she initially wanted to see a six-cent decrease from 2016. Brainard suggested a four-cent decrease instead. In the end, the council voted 4-3 on a five-cent decrease at their Oct. 17 meeting.
Brainard proposed a rate of 79.85 cents per $100 for 2017. He said the previous year’s increase was partially due to a one-time billing error recovery where the city chose to charge more to make up for a previous tax miscalculation on the state’s part. He said that increase, around six cents per $100, wouldn’t be applied for 2017. Without that six cents per $100, Carmel’s rate would have been approximately 77 cents per $100 for 2016.
City Councilor Sue Finkam said she promised her constituents that taxes would go down to approximately 77 cents per $100. She said this doesn’t include a nearly two-cent-per-$100 increase to fund a portion of nearly $242 million in infrastructure bonds approved in January.
The one-cent difference could mean approximately $600,000 in lost property tax revenue for the city, according to Curt Coonrod, a financial advisor for the city. In addition, Carmel might not receive as large of a portion of the County Option Income Tax, which is distributed among municipalities in Hamilton County. Coonrod said a lower tax rate can change the formula and could mean $300,000 less in COIT funds for Carmel.
“Anytime we can tax $600,000 and get 50 percent added to it, that’s a good deal for taxpayers,” Brainard told the council.
Coonrod provided financial projections for Carmel based on the different tax rates. A two-cent decrease had Carmel projected to have budget deficits, so a one-cent decrease was suggested instead.
Finkam voted for the tax rate of 78.85 cents per $100 and was joined by Councilors Carol Schleif, Laura Campbell and Kevin “Woody” Rider. Councilors Ron Carter, Bruce Kimball and Jeff Worrell voted against the proposal.