County looks at EDIT

Taxes and trust.

Jay County officials reviewed tax revenue Wednesday and rehashed discussions about allocation of economic development income tax (EDIT) funds.

Jay County Redevelopment Commission, Jay County Council and Jay County Commissioners heard from Jason Semler of consulting firm Baker Tilly, who explained how the state distributes taxes to counties.

Income taxes are collected based on adjusted gross income for citizens, said Semler. The more people that live and work in Jay County, the more tax revenue a county gets.

“As the population grows, as income grows, that revenue increases,” he said.

Jay County’s EDIT (economic development income tax) funds come to $1,053,278 this year. That amount is split between the county and its municipalities, making the county’s distribution $636,967. Semler explained those amounts distributed to municipalities and the county are determined by tax levies, making adjustment of the way the funding is split currently out of the county’s control. (He added council has the ability to increase or decrease the tax rate with exceptions, such as obligations to bond payments.)

EDIT dollars can be used for any legal purpose per legislation dating back to 1995, he continued. Prior to that date, EDIT funds could only be used for economic development projects.

The county has generally spent less of its EDIT funds than it receives each year — in 2022, however, the county received about $600,000 and spent $771,000 — and has some money left over in its account. (In total, there is $1.3 million in the county’s EDIT fund currently.)

Council member Cindy Bracy asked if commissioners have full control over how EDIT dollars are spent. Semler said council ultimately has the decision if it will appropriate the funding, although money can be transferred within funds without asking council for an additional appropriation.

“We have the EDIT fund and it’s all under commissioners control,” said Bracy. “Do other counties do that? Is that required by law? Or can we put that in place where it’s not (the case)?”

Semler said he would have to check state code on the matter.

Bracy’s question relates to ongoing tensions between officials over disputes relating to Jay County Development Corporation. Commissioners tabled the group’s budget claim for three months before they approved half of the year’s funding — JCDC typically requests half of the year’s funding in January and the remainder in July.

JCDC is also in the midst of adjusting its bylaws, a process that has been ongoing since October, when county government officials requested changes including appointing a commissioner and council member to the group’s executive board. (Commissioners have since made a counter proposal cutting city officials out of their request. They also asked for a contract between the county and JCDC and suggested the county hire a contracted employee as a community coordinator and grant writer to assist JCDC and all Jay communities.)

In February, commissioners rescinded the county’s five-year EDIT capital improvement plan, created by JCDC, which provided guidelines for how EDIT dollars would be spent through 2025. It allocated funds to several local organizations, including JCDC. Commissioners and council members had approved the plan at the end of 2020. County government officials have turned over since then, with only three current office holders — council members Jeanne Houchins and Faron Parr, and commissioner Chad Aker — having been in office at that time.)

Council member Matt Minnich asked how commissioners may spend EDIT funds, saying he had been told commissioners use the dollars as a sort of “slush fund.”

Council president Jeanne Houchins said she wouldn’t define it as a slush fund.

“Any money that they spend that’s not already budgeted that council has approved, they have to come before council to get that approved and spend that money,” she said.

If commissioners disagreed with allotting funds for one project, they are allowed to choose another to contribute the money toward another project instead, she added. She argued that the current commissioners would approach council about desires to make fiscal changes.

“That’s not true, Jeanne,” responded council member Harold Towell. “Our commissioners don’t do that.”

Towell referenced commissioners’ hesitancy to approve the claim for JCDC’s budget and that so far, they have only OK’d giving half of the organization’s budget.

“I was told (by commissioners) they could do whatever they want with that other half. This is without any contact with the council, or the council as a whole,” he said.

As long as commissioners aren’t spending more than money what was already approved, Semler confirmed, they’re able to use it for a different purpose.

Parr noted powers differ between council and commissioners.

“Council, we’re the fiscal body of the county funds, commissioners are the executive bodies, so it’s like, you can’t be a council and do commissioners’ job because that’s where the boundaries are,” he said.

Also Wednesday, officials discussed the duties Jay County Development Commission is allowed to handle, which includes dealing with tax increment financing (TIF) districts. It could also deal with something such as building renovation projects, county attorney Wes Schemenaur added.

Discussion turned to how TIF districts are determined and what capital projects fit within their scope. Houchins asked if officials could encompass the roughly 68 acres the county recently purchased within Portland city limits within a TIF district. (In order to do that, the city would need to create such a district (or expand a current district.)