What is EDIT? What is COIT? And how do they work together?

Kosciusko County Council will discuss both taxes at a public meeting at 7 p.m. Thursday in the courthouse.

There are different misconceptions, ideas, thoughts and opinions on the taxes, and many people aren't quite sure exactly how they work.

"EDIT is an economic development income tax," said county auditor Sue Ann Mitchell. "It is a tax that is based on your income."

Currently, the highest rate Kosciusko County can enact with EDIT is 0.4 percent. EDIT and the County Option Income Tax together cannot equal more than 1 percent. Kosciusko County currently has COIT at 0.6 percent.

EDIT can be used only for capital improvement projects, infrastructure and "things of a more permanent structure," Mitchell said. COIT can be used for anything regular taxes can be used for.

The theory behind having both COIT and EDIT, Mitchell said, is that the county can pay the bond payment for the Justice Building expansion project with EDIT funds. COIT can be used for additional costs the county will have to fund, including continued maintenance of the facilities, staffing and equipment.

The estimated bond payback is based on construction costs for the Justice Building expansion project totaling $22.59 million. The total assessed value of property in the county for 1999 was $815 million, which means one penny of tax raises an estimated $81,500. Bond payments on the building project will be an estimated $1.9 million per year, with payments beginning when the building is completed in February 2002.

If only property taxes are used to repay the bonds, an additional 24 cents per $100 of assessed value would need to be added to the property tax rate just to pay the bonds. Another 15 cents would be required to pay for maintenance and personnel in the expanded Justice Building.

Even enacting EDIT won't sufficiently help the county with all of its expenses, Mitchell said.

"That's not going to address staffing issues because (EDIT) is only going to address capital improvement," she said.

By raising COIT an additional 0.1 percent to 0.7 percent, and enacting EDIT at 0.3 percent, the county will have the funds it needs for both building and staffing. The additional 0.1 percent raised with COIT would generate approximately $481,056, Mitchell said. EDIT would generate at least $2.34 million for the county.

"That's based," Mitchell said, "on the population distribution as opposed to the assessed valuation."

According to information provided by Baker and Daniels, attorneys, EDIT may be distributed to members of the County Income Tax Council (which comprises the county council and each city or town in the county) according to the population of that municipality or according to its assessed property valuation.

Some towns, such as Syracuse, which have many expensive properties, prefer distribution based on assessed valuation. Other towns, such as Winona Lake, which have a great deal of untaxed property, prefer the population method of distribution.

A benefit of COIT, Mitchell said, is that the county is not the only beneficiary of the tax money. Townships, towns, libraries and cities can receive funds.

"EDIT is not guaranteed funds for any entity. They don't just get them," she said. "They have to have a plan and get that plan approved."

When the county council or town has a plan, they would receive the tax funds. If they don't have a plan by the end of the third year, any money that was due them goes into the common pot and is distributed to those who do have plans.

One concern many area residents - especially those on fixed incomes - have about EDIT is what kind of income would be affected.

"Social Security is not affected" by EDIT, Mitchell said. Social Security is taken out on the Indiana tax forms before a person's taxes are figured.

"Those people who have other reportable income will pay on (EDIT) also," she said.

As an example, if EDIT is passed at 0.3 percent and a person earns $700 in a pay period, that person would pay $2.10 in EDIT, in addition to what they are paying now.

Whether or not EDIT is passed is in the hands of the County Income Tax Council. However, the county council has approximately 62 percent of the votes on the income tax council, followed by Warsaw with 17 percent and Syracuse with 4 percent.

"Whatever the county council decides, that's what happens," Mitchell said. "Whatever the mix (of taxes) is, the county council is looking at the fairest way to tax people for everything we're doing in the county."

And, she said, government has to go on, whether or not the county has a bond issue to pay. By enacting EDIT instead of increasing property taxes, it "will help spread that tax over more people and different people than who are paying taxes here," she said.

"The other thing that needs to be looked at is that the economy is very good," she said. "Therefore, the money COIT and EDIT can generate is very good."

In the future, the economy may take a downturn and the county would receive less money. By not using up the cumulative funds the county has saved, those funds can provide a safety net in the future.

She said, "The bottom line is, as far as the jail, we have no choice. We have to be able to house more prisoners."

So why didn't the county council approve enacting EDIT last year?

"A year ago when this was before the county council," Mitchell said, "they didn't approve it because we didn't know where the county was heading, the financial impact this would have, and the county council didn't feel it was an appropriate time to pass it."

Now that the county council has all the information and they have a plan, she said, they believe it is an appropriate step to take. But, she said, the county council is not going to collect tax money just because it can. If there was another way to raise the money, she said, the council would take it. [[In-content Ad]]