Adopted November 1984, Amended November 1998

The League of Women Voters of Indiana believes local governmental units in Indiana should be given more flexibility to fund their own services. While not all units are equally in need, those that are should have the ability to choose what seems to them the most appropriate remedy, as established by law.

The League of Women Voters supports allowing cities, counties, and towns a variety of taxing options or alternatives for revenues for financing local governmental operations. Specifically, the League supports:

• A program of state fiscal support of local governments. Funding sources could include additional distributions from the sales tax, excise taxes such as those on cigarettes and alcoholic beverages, the motor fuel tax, and personal and corporate income taxes. Fiscal support of local governments should be one of the uses of state general fund surpluses.

• That state funds should be used to compensate local governments in lieu of taxes not paid on tax-exempt state property.

• A local option income tax at optional rates, which allows increases in local revenues for purposes in addition to property tax replacement. The tax should be levied on both personal and/or corporate income. When a single county adopts the tax, it should apply to all income generated in that county, with no credits being given to either residents or nonresidents. When two counties adopt the tax, revenues should be shared between the counties of employment and residence.
  

• To adopt a local option income tax, the county and its cities and towns should be given proportionate roles according to their populations; the county population would be taken to be that population outside the cities and towns in the county.

• A selective loosening of the property tax control program as enacted in 1973 and subsequently amended. The League does not favor the complete elimination of property tax controls.

• A food and beverage tax and an innkeepers' tax as local option sales taxes. The League recommends that, in most cases, the innkeepers' tax be used for general purposes rather than being earmarked for specific expenditures.

• Financing of local government with both additional state support and local option income tax.