Key committee passes bill returning $550M to local communities

INDIANAPOLIS (Jan. 28, 2016) – The Indiana House Ways and Means Committee voted unanimously Wednesday in support of State Rep. Todd Huston’s (R-Fishers) bill returning $550 million to local governments.  

“We understand that local governments face unique challenges in funding much-needed services, particularly in maintaining and improving local roads and bridges. House Bill 1110 would immediately infuse $440 million into local government budgets, with an estimated $110 million to follow over the next four years,” Huston said. “This proposal provides for a disbursement free of restrictions to the counties and municipalities where the funds originated.” 

State Rep. Tim Brown (R-Crawfordsville), chair of the House Ways and Means Committee and co-author of the bill, said the funds were collected from Local Option Income Tax revenue and held in reserve by the state in trust accounts for each county.  

“Under House Bill 1110, local governments can use these funds for any purpose in which the community originally collected the tax,” Brown said. “Since these revenues were raised by local units, we believe our local leaders are best equipped to decide how to invest their money.”  

State Rep. Milo Smith (R-Columbus), co-author of the measure, said the bill makes a one-time payment and does not raise taxes or create new debt since the funds already exist in trust accounts.  

“Undoubtedly, local governments face unique challenges in being able to provide for the health, welfare and safety of its citizens,” Smith said. “They are the ones who best understand what their communities need and this measure would help them meet their challenges.” 

State Rep. Donna Schaibley (R-Carmel) also co-authored the proposal. She said returning the majority of these reserves to local communities would help keep Indiana headed in the right direction. 

“This bill creates a unique opportunity for locals to receive the majority of their Local Option Income Tax reserves held by the state,” Schaibley said. “This is part of an overall effort to provide locals with more flexibility while also giving them options to meet their road and bridge funding needs.” 

HB 1110 will now be considered by all members of the House of Representatives.