Local elected officials are expressing a lack of confidence in the Indiana Department of Revenue when it comes to local income tax money being distributed by the state.
Two weeks ago, the state announced that a computer software error prevented the distribution of $206 million in local option income taxes to the 91 Indiana counties that collect the taxes.
The Howard County Treasurer’s Office last week received partial payments for the 2011 local option income tax, county option income tax and economic development income tax for 2011 and the first four months of 2012.
The city of Kokomo will receive $409,000 in local option income taxes for 2011 and $199,000 for 2012. The city will also receive a total of $213,581 in EDIT funds.
Howard County will receive local income taxes in the amount of $250,225 for 2011, and $125,203 for the first four months of 2012. A total of $105,084 in EDIT taxes will also be received.
“There have been three substantial mistakes in the past 15 or 16 months by the state,” Kokomo Mayor Greg Goodnight said Thursday. “I don’t have enough confidence that these figures are right.”
Goodnight said the city is taking a wait-and-see approach when it comes to an independent audit of state financial records.
The concern is that the local units of government will spend the money and than have the state indicate there was another mistake made by the state and the funds should not have been distributed to the counties.
“If it ends up being money we didn’t expect, it won’t change how we look at spending,” Goodnight said. “We’ll stick to the budget. We’ve been spending 8 to 10 percent under budget.”
Goodnight said the additional revenues will be used by the city as an operating balance.
“We’ll put it aside,” he said.
In an effort to track how funds are spent, Howard County officials indicated this week that the state funds will be either placed in the county’s Rainy Day Fund or in a newly created special account.