"Wallets are going to get lighter..." Vigo County income tax is on the rise

Vigo County Income taxes are going up to help pay for the new jail. How could this affect your wallets and the county? Indiana State University economy professor breaks down what it means.

Posted: Aug 16, 2018 6:59 PM

VIGO COUNTY, Ind. (WTHI) - Standing room only at the county council meeting Tuesday. That's where the council approved Vigo County income tax increase by .75%. Making income taxes go from 1.25% to an even 2%.

A lot of people living in Vigo County are not happy about it.

"I could stand to pay more taxes for a lot of things," Sam Martland, county taxpayer said. "This doesn't seem to be one of them." 

An economics professor from Indiana State University helped to break down what this could mean for your wallet and the county.

He and colleague Kevin Christ of Rose Hulman University didn't think it was a good idea.

"It soaks up about two thirds to three-quarters of the tax capacity that the citizens of Vigo County have to fund this single purpose," Robert Guell, an economics professor from ISU said. "For that reason, both of us were not excited." 

But, he says that residents should have expected a large increase in taxes coming their way.

"We needed to do something with the jail, maybe not this, but we needed to do something," Guell said. "That something was going to cost some significant money." 

With the potential for future projects, like renovating the schools around the county, he says this could be a sign of things to come. 

"Everyone should understand that their wallets are going to get substantially lighter over the next 20 years because of tax increases necessary to fund these very large things," he said.

The Vigo County council has a cap on income taxes that they haven't reached yet. If the income tax continues to increase some residents might pack up and move across county lines.

In Indiana, you get taxed for the county you live in, not the one you work in.

"For instance, I might buy a house just over the Clay County line, face lower taxes over there and there would be no way for Vigo County, the county council or any executive in the county council to protect their need to have my share of taxes," Guell said. "I'd just move away from my taxes. That is one of the consequences of raising taxes, especially in Indiana. If the tax increases get too big, people will look to escape them."

These income taxes are going to help pay for the new jail.

However, the county still has about $900,000 dollars to pay off on the current jail.

That's with a payment plan that last's until 2020. 

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