GOSHEN — Elkhart County’s varied taxing units will collectively get $5.16 million in unexpected income tax revenue, compensation for an accounting error by state officials that had short-changed counties all over Indiana.
“This is awesome,” said Dawn Truex, chief deputy in the Elkhart County Auditor’s Office, which received the funds Thursday. “The $5 million, that’s quite a lot of money.”
John Letherman, president of the Elkhart County Council, was a bit more sardonic. State officials last year had reported that Elkhart County had received too much in income tax payments, $16.34 million to be exact, and had initially called on a reduction in income tax distributions here starting this year.
“It’s amazing they would send us a big check like that, and I called the auditor’s office and said, ‘Whatever you do, put it in the bank because we might have to send it back,’” he said.
All told, Indiana officials will be distributing around $205 million around the state because of the accounting error, a snafu that led Indiana Department of Revenue Commissioner John Eckart to submit his resignation.
Locally, the funds are to be shared by Elkhart County government and the many other taxing units that rely on income tax funding, including the cities of Elkhart and Goshen as well as the other towns, cities and school districts, according to Truex. State officials still haven’t detailed the breakdown of how much each taxing unit should get.
The $5.16 million represents income tax revenue Elkhart County should have received, but didn’t, in 2011 and the first four months of 2012, plus interest, according to the Association of Indiana Counties. Of the total, $4.29 million pertains to county adjusted gross income tax, or CAGIT, revenue while around $865,000 pertains to economic development income tax, or EDIT, money.
At the county level, CAGIT money typically goes to the general fund or for bond payments on the county jail, opened in 2007. County leaders have typically earmarked EDIT money for road projects.
The unexpected distribution comes amid belt-tightening by Elkhart County, the cities, schools and other entities here as they deal with reduced revenue and the shaky economy.
“This isn’t money that we’ll be able to use on anything new,” Letherman said. “If we get to use it, it’s going to be money we can use to catch up on things.”
Reporter Angelle Barbazon contributed to this report.