Expert: Evansville still competitive despite tax, utility rate increases

From wheels to water, 2018 will be the year of new or higher taxes in addition to more costly water, sewer and electric rates in Evansville and Vanderburgh County. Despite this, local economic development experts believe the city and county will still remain competitive when it comes to attracting new businesses.

On Monday night, the Evansville city council passed a 0.2% increase in the local income tax rate for anyone living or working in the city or county. Revenues from the tax hike, which is expected to be in the millions, can only be used on public safety-related expenses.

The "public safety tax" is just one of many new taxes or tax increases going into effect in 2018. As part of its 2018 budget, the EVSC will levy an historic preservation tax on residents' property tax bills. The new tax levy is 0.005% and is intended to help fund repairs to historic structures in the city and county, including the century old Bosse Field.

In August, the Vanderburgh County Council approved a wheel tax hike by a 5-2 margin. The county excise tax and wheel taxes were increased to $20 for all vehicles. The tax hike is expected to pump an additional $1 million into county maintained road projects in 2018.

Earlier this year, the Indiana General Assembly approved the raising of the state's gas tax rate by 10 cents per gallon. Revenue from the gas tax hike is expected to be funneled back into state road projects.

Water, sewer and electric rates are also on the increase. Sewer and water rates are expected to rise 16% and 14% respectively. The Evansville Water and Sewer Utility had to raise sewer rates in order to help fund the $729 million dollar sewer overhaul mandated by the EPA. Water rates area also increasing in order to help fund the replacing of thousands of miles of century old cast iron pipe.

Vectren will raise electric rates for both industrial and residential customers over the next seven years in order to help fund the modernization of the electrical grid.

"I don't like paying taxes. No one likes taxes," said Greg Wathen, the CEO of the Economic Development Coalition of Southwest Indiana. "But there's a basic amount of funds that will be raised by units of government to pay for these services. You're going to get it one way or the other."

While the tax and rate increases will undoubtedly have an impact on personal finances, especially those in economically challenged situations, Wathen said it's important to keep things in perspective. Vanderburgh County's local option income tax rate was among the lowest in the state, Wathen said.

"The perception of the individual on the street is all of this is happening at one time," Wathen said. "I think it goes back to perspective. If you have only lived here and you've never lived anywhere else and you see these rates and things rise, you're probably thinking that this is out of whack. If you lived anywhere else, in most cases, you'd think we're much more comparable."

The tax and rate increases also shouldn't have a chilling effect on the potential for new or expanding businesses in Evansville either, Wathen said.

"Compare us to Texas, for example. A comparable home down there may have two or three times more in property taxes than what we pay," Wathen said. "They have a local sales tax. We don't. It really depends on your perspective."

Mayor Lloyd Winnecke was opposed to the public safety tax hike because of the other concurrent tax and rate increases taking effect in 2018, he said. He too believes the city, county and region are prime for investment.

"Businesses understand that there needs to be active and viable utilities. They understand we're under a federal mandate to update our sewer system," Winnecke said. "Evansville is still a very affordable place to live. Look at national rankings and Evansville -- in terms of overall cost of living -- is still very, very affordable."


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