Kokomo, Greentown, Russiaville join county to implement new income taxes
The last thing anyone likes to hear is their taxes are going to rise. But residents in Howard County will need to prepare themselves for exactly that over the next couple of years.
Last week, the Howard County MUST (Municipalities, Universities, Schools, and Taxing Units) council convened and approved more than two percent in income taxes to help cover governmental operating expenses. The move is taking place in the wake of legislation passed by the Indiana Statehouse to reduce property taxes.
The now-infamous Senate Bill 1 (SB1) passed in 2025 increased homestead deductions and business personal property exemption thresholds while also eliminating a 30-percent depreciation floor for new equipment. The result means literally billions of property tax dollars being removed from government coffers across the state, and more than $100 million for Howard County governmental units.
The state legislature, instead, authorized local units of government to establish Local Income Tax (LIT) rates. This has prompted local governments to do exactly that, hoping to recapture revenue lost through the SB1 changes.
The MUST council convened on Oct. 30, consisting of representative from Howard County, the City of Kokomo, and the towns of Russiaville and Greentown. They considered and adopted four separate rates, which are expected to take effect by 2028.
Howard County Council president Darryl Maple presided over the meeting and explained that the taxation issue has been studied over the previous month so that recommendations could be brought forth.
“I’ve had some discussions with each unit individually, and we had some time to get educated on the process and what we’re trying to do,” said Maple. “We need to discuss an overall fire and EMS, and so I thought it may be prudent to start with that conversation and get that number kind of locked in.”
Emerging from his discussion with the relevant taxing units, Maple proposed that the MUST council adopt a 0.4 percent LIT rate to cover fire and emergency medical services. This motion was made, and the council approved the rate.
“At some point in time, we will dive into exactly how that gets broken down,” said Maple. “For the state’s purposes right now, all they care is that we decide on a rate and what that rate is. I have had discussions about part of the rate, but we haven’t had any discussions with townships and how the rest of this shakes out.”
“This, to me, is probably the hardest part of this entire process because, looking at the numbers, Greentown and Russiaville don’t necessarily need to have a higher rate to match what Kokomo needs.” — Howard County Council President Darryl Maple
Maple disclosed that the new income tax rate should generate roughly $10 million, which should ensure no loss of revenue for those services. He then turned to the prospect of a countywide municipal services rate, which would directly affect residents in Kokomo, Greentown, and Russiaville.
“We can do it two ways,” said Maple. “Either we can do a unified unit rate for Kokomo, Greentown, and Russiaville, or if we can’t come to an agreement, that would mean Kokomo opting out and then establishing a rate for Greentown and Russiaville.
“This, to me, is probably the hardest part of this entire process because, looking at the numbers, Greentown and Russiaville don’t necessarily need to have a higher rate to match what Kokomo needs.”
City of Kokomo Controller and MUST representative Thu Caven declared the city’s position as favorable for a 0.6 percent unified municipal rate. Greentown and Russiaville were not supportive of that rate, as their communities do not need that much revenue. They countered with a 0.3 percent rate.
Maple confirmed that the lesser rate was sufficient to ensure the towns do not lose revenue in the shift from property taxes to income taxes. This caused the City of Kokomo to opt out from the unified county-wide rate and instead establish a 0.95 percent rate for itself.
The board approved both of these measures, ensuring no loss of revenue for any entity. Next, the MUST board considered a countywide service rate.
“Anybody who lives inside of Howard County would have this rate to help fund local government units here that we maintain: the jail, roads, surveyor, assessor, auditor, all that sort of stuff. I’m just naming a few.
“From my seat, and from the people I’ve talked to, I think we could get by with a rate of 1.0 percent. That keeps us whole and able to fulfill our bond obligations for the new jail building and set right where we’re at currently and make things work for now.”
Maple noted that the state has authorized a LIT of up to 1.2 percent, but he did not feel adopting the full rate was necessary. The board agreed and approved the 1.0 percent rate.
Finally, the MUST board considered a non-municipal rate, which will cover the Kokomo Howard County Public Library, the Greentown Public Library, and the Howard County Solid Waste (Recycling) District.
“We don’t have to do this today, but it looks like we can go up to a 0.2 rate,” said Maple “I think a 0.1 rate is enough, and then we can break it down from there. This would cover them and get them they’re whole as well.”
The council approved a 0.1 percent non-municipal rate.
With these new rates established, Maple estimated that the income tax revenue generated will offset the property tax losses. County, non-municipal residents will pay a 1.5 percent LIT rate, while Greentown and Russiaville residents will pay a 1.8 percent rate. Kokomo residents will pay a 2.45 percent rate.
Maple stated that the MUST council and local governmental units will continue to study and review the revenue issue and may return to it as local governments have until 2028 to finalize their decisions.
“I want to understand the needs and wants and what we can or can’t do to try to keep everybody whole and right the ship,” said Maple.