News From Terre Haute, Indiana

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March 1, 2013

Vigo set up local option taxes back in 2003

TERRE HAUTE — Vigo County enacted local option income taxes in 2003, with collections starting in 2004.

The Vigo County Council opted to enact the County Adjusted Gross Income Tax, called CAGIT, which is used to offset property taxes, and the County Economic Development Income Tax, called CEDIT, which is used for economic development improvements and incentives.

The two combined total a 1.25-percent income tax, with 0.75 percent collected for CAGIT and the remainder for CEDIT.

This year, Vigo County will receive $13,261,054 in CAGIT distributions, according to the Indiana Department of Local Government Finance. CAGIT is distributed to all taxing units such as cities, towns, townships and libraries and some school funding for property tax replacement.

The county’s portion of CAGIT includes $1.2 million used to fund the county general fund and an additional $3.6 million to fund public safety.

Vigo County, under a directive from the Indiana Department of Local Government Finance to all counties, created a separate budget line this year in which CAGIT funds are deposited to pay for public safety. That includes all costs for the county sheriff’s department with the exception of the sheriff’s annual salary, at $135,080.

“The sheriff’s salary comes out of the general fund per state statute,” said Vigo County Auditor Tim Seprodi.

Vigo County this year will receive $9,088,659 in CEDIT, commonly called EDIT, money. CEDIT is distributed only to the county and municipalities and towns. The funding is divided based on assessed value, with Vigo County’s share at more than $4.7 million and the city of Terre Haute’s share at more than $4.2 million. The remainder is distributed to the towns of West Terre Haute, Seelyville and Riley.

When enacted, this fund was only to be used for economic development; however, a change in state law allows the funds to be used for nearly any budget requirement. However, the Vigo County Council has held a tight rein on that money for only economic development.

The county’s EDIT plan this year, for example, includes $480,000 for roadway projects and improvements to local roads and streets; more than $1.2 million for intersection improvements; $125,000 to the Terre Haute Economic Development Corp.; $150,000 for the county’s industrial park; and $50,000 for riverfront development.

The county previously loaned more than $141,000 to the town of Riley for a water project, which the town repaid and has encumbered appropriations for the future development of a Riley Lock Park, said Ryan Oilar, administrator for the  Vigo County Council. EDIT is also used to pay off bonds funding the Canal Road project, which now links to the Indiana 641 bypass.

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