Mayor Moore makes his pitch, says additional taxes may follow

This article is brought to you by Moore's Home Health and Medical Supply. For more than 69 years, Moore's Home Health has been Howard County's leading provider of assistive and adaptive ​home medical equipment and supplies. Call 765-454-5210 or visit Moore's at 608 W. Markland Ave. to let them help meet your healthcare needs!

Mayor Tyler Moore has been placed in a difficult situation. In turn, the Kokomo Common Council also faces a tough decision. The City of Kokomo needs cash, and lots of it. Between inflation and a sweeping decision by the Indiana Legislature to all but eliminate property taxes as a source of local revenue, municipalities, counties, townships, schools, and libraries all are facing a funding crunch.

After much deliberation, Moore opted to propose a $10 fee on trash collection last October. That measure failed, and the mayor has acknowledged that his last-minute approach to pushing the fee through the council without warning was a misstep.

But the fee has returned. Once designed to offset rising costs, the trash fee now represents the point of a taxation spear. There will be additional taxes and fees proposed, sooner rather than later. Whether the community understands and begrudgingly accepts these fees is up to Moore and his elected contemporaries.

The Kokomo Lantern sat down with Moore last week to give him the opportunity to explain the fee and the need he sees for it. To give readers the clearest understanding of the mayor’s position, we present the full interview on the subjects of the trash fee, the city budget, and why people should pay attention to what their elected leaders are doing at every level.

This interview was lightly edited to remove filler words and some pleonasms (repetitive phrases).

Kokomo Lantern: People are a little upset about the fee, a $10 assessment on trash. You've had an opportunity to talk to people about this. What do you want them to understand?

Tyler Moore: I want them to understand that, yes, although the fee that's collected is being placed into a specific fund for support of trash and the street maintenance department, ultimately, it does that and basically supports challenges that we face in the general budget. Whether it's considered a fee or a tax, it's something that is additional being paid, but it’s the first tool that we have to help navigate the financial challenges that the legislation that's been introduced at the state level will create, not just for Kokomo, but for our townships, for our districts, and everything across the state.

KL: This isn't solely because of SEA1 (Senate Enrolled Act). You requested this fee last year because of a projected shortfall. What was causing the shortfall at that time?

TM: The increased costs for services and such. Just looking at the cost of paving a lane mile of road alone has increased almost 50 percent over the last four or five years. The cost of trash totes, dump trucks, everything is increasing. We were looking at that and knowing that we were rolling into a negotiation year with the AFSCME workers, and anticipating what they were going to be negotiating for in regards to higher pay raises than they had received in years prior.

We wanted to have that revenue stream in place to be able to comfortably and better negotiate through that. Since it got, in a sense, postponed to now, our hope is that the council -- now that they are more educated on and informed on what were budgetary concerns or shortfalls, as well the information and education they received on the impacts from SEA1 – that they now get it. We see this as one of the initial and low-hanging fruit tools that municipalities have at their disposal. That's why it's back on the table.

KL: There's always confusion with people about the fungibility of tax revenue, and in this particular case, there may be some misunderstanding about how that revenue is used. It's really no different than any other general fund revenue.

TM: That's right. It's going to allow us to spend money or cover costs in a variety of areas even though it is a designated trash fee.

KL: And people think, well, if you're not spending it on trash collection, then why are you collecting it? How do you help people understand that?

TM: Yeah, that's a lot of money that's coming in. So, the example you use is a pie. We'll be able to add a little bit or enlarge the slice of the pie. Even though this trash fee is going to be dedicated to the trash service, it does free up money from the general fund that would have been allocated for the trash service. That allows us to cover other costs.

For example, we're being more intentional on starting an engine rotation with our fire engines. Having this fee will relieve some of the pressure on the budget trying to manage the needs of so many different departments. Although this fee is dedicated towards trash, it will go into the general budget.

KL: So, this isn't a situation where you're going to spend $2.5 million more on trash collection than what you're already spending.

TM: That's not what this fee is for. It is to stem rising costs and allow us to address needs in other departments by having that other source of revenue coming in.

KL: Without this fee, what does the 2026 budget look like?

TM: If that additional source of revenue is not there, we would be looking at adjusting personnel payroll in a number of the departments, as well as some of the equipment needs. It means that we'd have to go …

KL: Are we talking about wage reductions when you said “adjusting?”

TM: No, not wage reductions. Negotiating with the AFSCME workers, it would affect the percentage … They'll still be receiving a raise, you know, but the amount that we would be working toward would be lower than what we're currently in discussions with them on. Also, we would look at the equipment needs that are rolled into the budget. We may have to pull out a trash truck. We may have to pull out a dump truck. We might have to spread out or push back the fire engine. There will be cuts all across the budget. It wouldn't just be in the street department.

KL: We're talking about $2.5 million, right? That's hard to find. So, should people expect lesser service?

TM: No, I think that pretty much we’ll provide the same service. We've been operating on what our department heads would consider a bare bones budget anyhow, and kudos to them for what they collectively did to work within the budgetary numbers for last year. The proposed budget for 2026 is almost flat or identical from last year.

KL: So, give me the sales pitch, because what you've just told me seems to be, if you don't get the fee, we're fine.

TM: Well, we're not. I mean, we're fine with what we have, but people are expecting more streets to be paved. They're expecting the equipment that our first responders are using to be up to date. These are the things that won't happen. We won't upgrade a lot of the equipment. It'll be challenges that the departments will have if they're still working with equipment or engines that are over 20 years old.

KL: Now, I noticed that there is a second fee in this ordinance that takes place January 1, 2028. Another $5 fee.

TM: It's the same fee. It just is bumped up to $15.

KL: It seems added, obviously, for political reasons. I mean, you don't have to go before the council a second time for it.

TM: Looking at the financial impacts that SEA1 has, 2028 is when the ceiling on business personal property taxes goes to $2 million, and the floor drops on depreciation. So much of our tax revenue is dependent upon the receipt of business personal property tax. Seeing that budgetary shortfall imminent is why the timing of an additional $5 increase in 2028 falls in line with what we need, what we’re losing. If what we're being told by our consultant is true, budget projections in 2028 show we stand to lose about 11 percent of the anticipated tax revenues that we would have had SEA1 not been put in place.

KL: That’s on top of whatever we've lost going into 2028 and then growing from there. People probably need to know that Kokomo is a bit unique when it comes to the business personal property tax, because we are so heavily reliant on industry and equipment. Bigger cities that have robust industrial investment lose big.

TM: Yes, Again, I think the legislature looked at SEA1 as a one-size-fits-all fix, if you want to call it a fix. Communities like ours that are heavy industry, that rely on that revenue, will experience a harder hit than some others. Even looking at income taxes, some of the “donut communities” around Indianapolis, their budgets are 50% property tax and 50% income tax because of the higher incomes that they have, or the amount of people who live there but work outside of their counties and take that income tax home.

We don't get that. We don't. Even though we may have a strong, sizable workforce, the level of incomes in Howard County doesn't bring in the same tax revenue. This creates challenges when we're trying to attract and retain good employees and keep the level of services at what people expect.

KL: Paving your streets, picking up your trash, doing the things that you really want, it becomes close to impossible, the way this thing plays out. But this fee isn’t going to cover it, right? Do you have to look at other options?

TM: Yes, this trash fee, and its eventual increase, will slow the bleed, but won't stop it.

KL: I hope people are aware the legislature authorized an income tax for local municipalities and counties to put in place. Is that something that you are considering?

TM: We've been in discussions with the county about it because it would be a joint city-county initiative. Really, in our municipal state organizations and county state organizations, it's a bipartisan discussion. It's a bipartisan effort. Everybody's locking arms and realizing that with the tools the state has allowed us to have, the income tax could come in 2027, which would then go into effect in 2028.

KL: And there are other options available to you. (Kokomo Common Councilman) Dave Capshaw (R-1st) has been pretty vocal about the possibility of food and beverage tax, but that takes legislative approval, right?

TM: Yeah, and that's one of my heartburns with the tools the state legislature says we have. That’s fine if they're going to put us in a position where we need to make the tough decisions at the local level. In both our opinion and county's opinion, the tourism that Kokomo and Howard County has experienced since the construction of Championship Park, it has been in the top 10 tourist attractions in the state in the last three or four years. So, there's a lot of lost revenue we could take advantage of, just like they did when we got the innkeepers tax moved up.

I don't think we'd have a problem garnering the support for a food and beverage tax, because that's more of a user tax than across the board. But we have to ask for the legislature’s permission. They've got to propose legislation and get it passed so we have the ability or the opportunity to consider it. If we can't get our local legislators to collectively recognize that and support it in order to propose it, we're in a trick bag.

We've talked about it for a year and a half, and I get that when we first saw the benefit of the tax, it was towards the tail end of the legislative session at the time (in 2024). It was our understanding that the (House Ways and Means) chairman (Jeff) Thompson was willing to entertain it and still try to work it in. But our local legislators weren't in unison in support for it, which is why we backed off and looked at trying to revisit it at a different time. It's not a dead issue. It's a timing thing. We didn't take advantage of the opportunity, but we were kind of waiting to see if SEA1 would have lifted that restriction.

KL: So, is this something you are considering for the 2026 legislative session, to request the tax for 2027?

TM: Yeah. We've been talking to the county about it. We've been talking to the (Greater Kokomo Economic Development) Alliance about it because they have the CVB (Convention and Visitors Bureau) and the Chamber (of Commerce). Obviously, that would affect their members. We have the support of those organizations as well, so, yeah, I think that's something that we'll continue to discuss a little more intently and earlier in order to get the discussion going and hopefully get support.

KL: Now, on Monday evening (Sept. 8), there were plenty of people who took to the mic to disapprove of this action, but a couple of them offered what they thought were solutions. One of them asked, why don't you go to more user-based fees instead of, I think he called it a backdoor tax. And I think he offered up a fee for large-item pickup. I presume that this is something that you have taken a look at.

TM: Yeah, and part of the reason we didn't move toward that was the same reason that people are saying we don't need the trash fee. This is Kokomo. Other communities may have a trash fee. Other communities do charge for large-item pickup. They do charge extra for curbside recycling. They do charge extra for limbs, leaves, and vegetation pick-up. But we haven't done that in Kokomo. I mean, that's part of the trash service.

Right now, folks have come to expect and appreciate the fact that we do pick up large items without additional fee. We do offer curbside recycling without additional fees. We do collect limbs and leaves, either during dedicated spring or fall pick-ups after major weather events.

KL: Other people asked why don't you start cutting programs altogether? I assume that you've also looked at that.

TM: A lot of people jump right onto the curbside recycling, but it only just shy of $300,000 in the overall budget. Cutting that is kind of just a drop in the bucket. There are good recyclers out there who take advantage of that. There are a lot who aren't, which adds to the cost. Yeah, we thought about cutting it. We thought about not picking up limbs and leaves as well. Yes, there's a facility on Dixon Road where folks can take them, but a lot of people don't have pickup trucks or want to throw them in the back of their SUVs or trailers to throw them out.

The last thing we want to do is cut personnel, but we know if we don't do anything, that will be an issue. I want to assure that it isn't part of the plan, that if this doesn't go through, we're going to start chopping heads, right? That would be a possibility. I mean, they would just end up not being replaced through attrition.

KL: So, through all this, what do you really need from the community?

TM: Not a complete understanding of the budgetary process and everything, but maybe a little bit of trust that we have their best interests in mind. I get imposing an additional fee is tough, but we need it to continue to provide the level of services -- and to hopefully increase that level of service -- not just in the street and trash department, but police and fire and parks … all the services.

This trash fee has a greater and far-reaching effect than just the trash service. It would allow us to again focus on the needs of all the city departments that provide all the services the citizens rely on.