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A commuter tax in Monroe County?

By Scott Tibbs, August 8, 2014

County Council member Geoff McKim wants Monroe County to consider a "commuter tax" on people who live in surrounding counties but drive into Monroe for work. McKim complains that Indiana's tax system is unfair to counties that import workers because the system "has all income tax collections going to the county in which an individual resides, regardless of where she or he works."

Whether a commuter tax is a good idea or not depends on what it is. A revenue-sharing agreement would be reasonable, but an added commuter tax would not be fair or reasonable. People should not be taxed extra simply because they commute into another county for work. Workers should not be punished for living in the "wrong" place.

As McKim points out, people who work in Monroe County but live elsewhere are using services and infrastructure provided by local government (city and county) but do not contribute to those services and infrastructure through their county option income tax (COIT) payments. All of that money goes to their home county. I actually agree that this is not equitable and the state legislature should consider what can be done to distribute the income taxes more fairly.

A better system would be revenue sharing, where counties like Monroe capture a portion of the existing COIT contributions from workers who live elsewhere. Since local government in both counties provide services and infrastructure to commuters, both should get a portion of the commuter's county option income tax payments. A commuter's home county should still get most of the COIT, of course, but it is reasonable to split that money.

Finally, we should acknowledge the elephant in the room. At least some of the complaining about Monroe County being a net importer of labor is resentment and bigotry by elitists (especially in academia) against "dirty foreigners." Elitists in Bloomington despise people who live in surrounding counties as being less educated, less "enlightened" and less cultured than the people of Bloomington. That same bigotry applies to people who live west of State Road 37, but is more intense toward people who do not live in Monroe County. Let's not pretend this is only an issue of equitable revenue sharing instead of bigotry and xenophobia.