Bloomington's Proposed Tax Hike: Balancing Budgets and Funding Vital Projects

Bloomington, Indiana, is facing a potential property tax increase that could significantly impact its residents. The city's mayor and council members are considering issuing a general obligation (GO) bond, which would require an additional $3.743 million in property tax revenue to pay back. This, combined with the 4% increase in the property tax levy already proposed for 2025, could result in an average 14.5% increase in property tax bills for Bloomington property owners.

Funding the Future: Bloomington's Ambitious Plan

Navigating the Tax Landscape

In Indiana, elected officials have the power to determine the amount of revenue they need, rather than the tax rate. The required tax rate is then calculated based on the chosen revenue amount and the total assessed value of the properties. Bloomington's officials are taking advantage of the fact that the overall net assessed value for the city has increased by around 12.8% this year. This means that the tax rate required to generate a 4% increase in revenue in 2025 would be lower than the 2024 rate.

Balancing Budgets and Funding Priorities

The proposed GO bond would generate an additional $3.743 million in property tax revenue, while maintaining the same overall tax rate as in 2024. This would allow the city to fund various projects, including $1.4 million for the 2025 Safe Streets 4 All initiative, $1.35 million for engineering projects, $100,000 for transportation plan projects, and $50,000 for neighborhood traffic calming. The administration believes that the bond is crucial to meeting the city's shared objectives.

Assessing the Impact on Residents

For a homeowner with a $200,000 assessed property value, the proposed GO bond would result in an additional $68.31 in property taxes owed. This is due to the fact that the net assessed value, after subtracting the homestead and supplemental deductions, would be $100,750. Applying the $0.0678 tax rate to this amount would yield the additional $68.31 in taxes.

Seeking Council Input and Approval

The Bloomington administration is seeking input from the city council on the amount, term, and specific projects to be included in the GO bond. A draft list of potential projects has already been provided to the councilmembers, and they are expected to provide their feedback on what should be included or excluded. The administration aims to have the bond ordinance ready for a council vote by mid-October, in time for the 2025 budget adoption meeting on October 8.

Addressing Concerns and Balancing Priorities

Bloomington's mayor, Kerry Thomson, has acknowledged the concerns of low-income and fixed-income residents who may struggle with the increased property tax burden. The administration is aware of the impact on these residents and is actively engaging with the community to understand their concerns. The proposed GO bond and the overall tax increase aim to strike a balance between funding vital city projects and maintaining affordability for Bloomington's residents.