Marshall County Council eyes restructuring of Local Income Tax as jail bond nears payoff

With the Marshall County Jail bond set to be paid off in early 2027, the Marshall County Council is exploring how to restructure the Special Local Income Tax that currently funds those payments — and county financial advisor Steve Dalton laid out the plan at Monday's council meeting.

Dalton told council members that once the jail bond is retired in February 2027, the county has the opportunity to revise how its Special Local Income Tax (LIT) structure works. A vote to enact the new structure would take place in September, with the changes taking effect on January 1, 2027.

The reassuring news for taxpayers, Dalton said, is that the overall tax rate will not change. "It's the exact same rate — just shuffling those specific numbers," Dalton explained, noting that while the bond payments will no longer be needed, the funding is still required for ongoing jail operations and other county functions.

The proposed new tax structure would redirect the Special Purpose 0.25% rate — splitting it between jail operations and a hybrid fund for the courts and PSAP, which stands for Public Service Answering Points, more commonly known as 911 services.

The proposed split is 0.20% for jail operations and 0.05% for 911 and courts. Dalton said the county will need to formally adopt two separate rates — one at 0.02% and another at 0.03%. He also noted that he needs to take a deeper look at what specific expenses are allowable under the Court LIT and the 911 PSAP fund to ensure the county maximizes its usage within State Board of Accounts guidelines.

The county's financial planner and council attorney will submit the proposed plan to the Department of Local Government Finance (DLGF) for review. If approved, the council will take up the new LIT proposals at its August meeting for a first reading, with final adoption expected at the September meeting. The deadline to have everything in place is October 1.