FORT WAYNE, Ind. (WANE) – Allen County Council members voted Thursday morning to implement a Correctional or Rehabilitation Facilities Local Income Tax (LIT) to fund construction of a new Allen County Jail. But the tax rate agreed upon isn’t what Allen County Commissioners wanted.

On Tuesday, the commissioners sent a letter to council members recommending they approve a tax rate increase of 0.15 percent to fund the jail which is expected to cost in excess of $320 million. Back in July county council voted down a 0.2 percent tax rate for the funding.

Thursday morning council first voted against approving a tax rate increase of .12 percent before agreeing on a .11 percent rate increase which was approved on a 4-3 vote.

The current Allen County income tax is 1.48% with the increase of .11, the new total will be 1.59%.

That would set total funding for the jail at nearly $317 million, short of the anticipated cost of the facility.

Commissioners want to build a new jail in response to a federal judge’s ruling regarding a lawsuit brought by a former inmate that the current jail is overcrowded and conditions there are inhumane.

The new jail would be built at 2911 Meyer Road.

Following the vote, the commissioners released the following statement:

“We are disappointed in this morning’s decision by County Council to fund the new jail in a manner that harms Allen County for decades to come. While Council finally took action 14 months after our first request, their decision puts our community in a difficult financial position to utilize a majority of our cash balances, disproportionately burden residents of unincorporated Allen County, and provide no room for inflation or interest rate hikes in the bidding process. This is short-sighted and not in the public’s best interest. However, they did make a decision and we will move forward with next steps as quickly as possible. Should the project be short of funding due to higher interest rates or inflationary pressures, we will be forced to return to Council in 2024 to ask for an increase in the Correctional LIT.”

Allen County Commissioners

The federal judge involved in the case had given commissioners a Nov. 1 deadline to come up with a funding plan. With the approval of the LIT, it appears plans for the jail can move forward.

The commissioners also emailed the media a breakout of where all of the funding is coming from.

Below is a table that reflects the estimated income taxes:

Est Income TaxGross Income
Correctional LIT Rate$         25,000 $         50,000 $         75,000 $       100,000 $       125,000
0.11$                 28 $                 55 $                 83 $               110 $               138
Table reflecting estimates of income taxes due from the .11 Correctional LIT Rate.

Taxes would go into effect stating January 2024. Note that actual income taxes may be less if taxpayer claims deductions/exemptions.

Breakdown of local income tax:

  • .4821 LIT Certified Shares
  • .1000 LIT Public Safety
  • .5300 LIT Economic Development
  • .3679 LIT Property Tax Relief
  • .1100 LIT Correctional & Rehabilitation LIT

Rachel Blakeman, Community Research Institute director at Purdue Fort Wayne gave here perspective on the jail tax hike.

“I think what we all can agree on is that nobody is excited to pay new taxes,” said Blakeman. “I think you can see that pretty much across the political spectrum is that no ones excited about this but the options of us making our own independent decision about what we wanted for the community was coming to an end.”