Jasper Common Council approves property tax increase for road funding despite opposition
The Jasper City Council approved reestablishing the city’s cumulative capital development fund at its full authorized rate at Wednesday’s meeting
The council voted 5-2 to approve Ordinance 2026-9, with Councilman Chad Lueken and Councilman Vince Helming casting the dissenting votes.
Cum Cap funds are specialized property tax levies authorized by Indiana law for local governments to fund long-term capital projects, such as infrastructure repairs, equipment purchases, or building improvements.
Jasper established the Cum Cap Development Levy in 2002 at the full $0.05 per $100 of assessed value. Over time, rising assessed property values put downward pressure on the levy rate, causing it to decline until legislative changes made it static at its current level around 2020, Clerk Treasurer Kiersten Knies told the council.
The fund currently contains $1.3 million and generates approximately $445,000 per year. The city has generally appropriated about $475,000 annually to the street department for paving and infrastructure needs. It is also used for matching funds for Community Crossing grants when awarded.
The impact of increased assessed values has the tax currently at $0.0368 per $100 of assessed value. The ordinance will push the rate back up to $0.05 per $100, established in 2002. This increase will generate an additional $175,000 annually for the city’s infrastructure and capital improvements.
Lueken argued against the timing of the tax increase, citing concerns about the burden on residents whose property taxes have already outpaced wage growth.
“Properties do not pay taxes. People pay taxes,” Lueken said during Wednesday’s meeting. “You can see very clearly that property values have far outpaced the increase in wages, and therefore, property taxes have far outpaced the increases in wages.”
He suggested they consider alternatives such as using the rainy-day fund or implementing a wheel tax. He pointed to the $2.4 million in rainy-day funds, and last year, the money earned about $100,000 in interest, which he said could help cover some of these increases.
“I would prefer that we would wait until this time next year to see how we actually fared on that revenue from the new post-SEA1 environment that we’re in now,” Lueken said, referring to recent state legislation affecting local government funding.
Councilman Kevin Manley defended the decision to return the tax to its original amount, emphasizing that rainy-day funds should be reserved for emergencies rather than for budget funding or street repairs.
“You don’t take stuff from a rainy day fund for something like this. That’s for an emergency,” Manley said. “We have a tornado that comes through, that’s an emergency. That’s where we use the rainy day fund, not to fund our budget.”
Lueken countered again, stating that no one noticed the decrease in funding except the clerk-treasurer’s office. “I think there is a better way to do it,” he said.
Clerk-Treasurer Kiersten Knies explained that the city has benefited from strong assessed value growth in recent years, which allowed officials to keep the cumulative capital development rate below its full authorized amount. However, she warned that growth is slowing while the impacts of circuit breakers are increasing.
“I do think it’s reasonable to expect a noticeable long-term reduction in revenue growth capacity for our city,” Knies said.
The clerk-treasurer also highlighted potential impacts from the governor’s gas tax suspension, which affects local road and street distributions from the state that the city uses for paving and road maintenance projects.
“Reestablishing the CCD rate is not creating a new tax, and it’s not exceeding what the state law already allows us to collect,” Knies said. “This fund already exists. We’re simply asking you to reestablish it to what it was originally.”
Mayor Ryan Craig emphasized the proactive nature of the decision, noting upcoming budget challenges for police, fire, and other city services.
“And it’s a minor increase to help offset major expenses for our roads,” he said. “And if we don’t take action on this stuff, we’re going to be behind the eight ball. We’re going to have to make it up somewhere to keep the amenities we have. We can’t keep cutting taxes, or we’ve got to start cutting services.”
Councilman Phil Mundy expressed concern about the continued delay of difficult financial decisions, preferring smaller, incremental increases over larger future tax hikes.
“We were constantly kicking the can down the road because we were trying to cut all the time to save, and we can’t continue doing that,” Mundy said. “I think if we do it in small increments, it’s not as hard on individual families if they can plan for smaller ones.”
Earlier in Wednesday’s meeting, Street Commissioner Jeff Theising gave an overview of the department’s activities this year, but ended his presentation by noting the impacts of increased fuel and other service costs. While Theising previously reported that asphalt prices had increased about 11 percent this year, he told the council in a recent change that contractors had added another 2.5 percent increase to that cost.
Increased fuel prices at the pump are also hitting the department.
“Inflation continues to plague our budget,” Theising said. “Fuel is on pace to put us 22 percent over what we budgeted for the year.”
The department also provides trash pickup, and according to Theising, that cost is up 8 percent, which may require the department to return to the council for additional funding later in the year.
During the discussion on the cumulative capital tax, Councilman Paul Lorey reminded the council of the impact of the increased price of asphalt on the department’s paving budget. In the 2026 budget, the street department’s paving allocation was reduced from $2 million to $1.9 million, while material costs increased by 13.5%.
“With a 13 and a half percent increase in materials and asphalt, that’s $270,000 this year that’s gone,” Lorey said.
Lueken acknowledged the validity of the arguments for the tax increase but criticized the decision-making process as disconnected from other budget considerations.
“The problem is I’m being asked to make a decision as if in a vacuum, disconnected from, isolated from all the other hard decisions that we’re going to have to make in the coming days,” Lueken said. “That is not strategic. That is ad hoc, and that’s a very difficult way for me to operate.”
Despite his opposition to the ordinance, Lueken urged the council to actually allocate the funds if the tax is implemented.
“Voting to increase this tax is one thing. Allocating it is a whole other thing,” Lueken said. “If this council passes this tax, I strongly encourage us to allocate that money come budget time. Because otherwise it’s pointless.”
The Cum Cap Tax is included in the annual levy approved by the city council, and the reestablished rate will be included in the 2027 levy.
