Funding local fire departments; Public Safety Tax discussions continue

With Dubois County volunteer fire departments facing funding shortfalls, elected officials are exploring the option of adding a public safety income tax.

Similar to the estimate provided by the county, implementing a public safety tax could bring in an additional $3.5 to $4 million annually for the taxing entities in Dubois County, according to a study completed by Indiana University Kelley School of Business students.

MBA students Cole Sigler and Brandon Strcich presented their overview and impact of the proposed Dubois County Public Safety Tax to a roomful of folks representing the local fire departments, emergency services, police as well as elected officials at Jasper City Hall Wednesday morning.

The public safety tax has been discussed publicly since early 2023. Then, Sheriff Tom Kleinhelter proposed that the county consider adopting a public safety tax to support his efforts to increase deputies but found the county council reticent to add to residents’ tax burdens.

Indiana has allowed communities to add 0.25 to 0.5 percent to local income taxes to support public safety services–79 of the 92 Indiana counties have adopted a public safety tax.

Since then, discussions have continued on the impact such a tax would have on the area’s volunteer fire departments. With their limited funding options, these departments are running into budget issues as they attempt to update equipment and vehicles to continue to provide adequate services throughout the county. The tax could help lessen that burden.

Here is a story we wrote earlier this year.

City of Jasper officials sought assistance from the Indiana University Center for Rural Engagement to clarify the tax’s impact in Dubois County. They coordinated with the Kelley School of Business to have students complete the study as part of their coursework.

Sigler and Strcich proposed a 0.25 percent increase to bring in additional funding for the project. Based on Local Option Income Taxes collected in 2023 ($18.5 million), they projected an annual increase of $3.5 to $4 million of annual funding to be shared between the county’s law enforcement agencies, 911 communication services, emergency management agency, emergency medical services, community corrections, and fire departments.

Based on local economic growth metrics, the students forecast the tax would bring in between $71 to $77.5 million over the next 15 years. Without the tax, they estimated the local volunteer fire departments alone would have a shortfall of $47 to $50 million over that same time period.

Approving the tax would increase the Local Option Income Tax from 1.2 percent to 1.45 percent, equating to an additional $100 paid annually from someone making about $40,000 annually or an additional $1.92 per weekly paycheck.

The new revenue would be split between the emergency services and volunteer fire departments based on the population they serve. Their recommended allotment coverage allowed each department a $1 million cumulative surplus.

Along with the projected tax funding, the students also created a template for local departments to use to make cost projections for their operations and future equipment needs over the next 15 years.

To implement the tax, the local tax boards must pass it with a 50.1 percent approval. Based on the split between the different taxing units, no single taxing entity can implement the tax without support from another taxing unit in the county (i.e., the councils of at least two taxing units can implement the new tax).

The opposition to the new tax included questions on ensuring the income was managed properly. Though the tax would be directly allocated to those departments, County Councilman Daryl Schmitt stated this could relieve funding from the taxing units’ general fund, and those funds that formerly went to those departments could be diverted to other uses.

He also asked whether they had examined other avenues to supplement these funds. County Auditor Sandy Morton said they could look at reallocating Economic Development funds currently used as property tax relief, but this would likely impact property taxpayers.

Jasper Mayor Dean Vonderheide noted that this was the avenue the state had created for funding public safety services. He added that not having the public safety tax hurt their opportunities for additional grants and funding because they weren’t considering the available funding options.

St. Anthony Fire Chief Scott Uebelhor stated that if nothing was done, it would likely impact their ability to provide the same level of coverage.

Jasper Fire Chief Kenny Hochgesang added that this could impact the area’s ISO rating, which would adversely impact the insurance rates residents, businesses and the industry pay. The Insurance Services Office (ISO) rating is affected by the fire coverage offered in an area. Huntingburg and Jasper both hold a Class 4 ISO rating.

Moving forward, the group agreed that the departments should use the new forecasting template to determine their needs for future discussions regarding the public safety tax.

It was also recommended that the different taxing units move forward together rather than working in opposition to each other.

In closing the meeting, Mayor Vonderheide stated he was glad they had brought everyone together for this discussion.