Bloomington City Council members expressed mixed feelings Wednesday about adding 0.25% to the Monroe County local income tax rate as proposed by Mayor John Hamilton.

At a special session of the council, Hamilton formally proposed an economic development income tax to fund various economic, climate and social justice initiatives.

The council will vote on the resolution for the tax next Wednesday to kick off the process of debate and voting by the entire Monroe County local income tax council.

Hamilton originally proposed adding 0.5% to the local income tax during a speech after being sworn in for his second term Jan. 1. The tax would have gone to a sustainability fund to mitigate climate change and work for climate justice, and he wanted it to be passed by the first half of the year.

Since the COVID-19 pandemic hurt multiple sectors of the local economy, Hamilton lowered his proposed tax increase in a July speech to 0.25%, and shifted its purpose to be for economic development. The increase would bring the local income tax rate to 1.595%, and generate more than $4 million of revenue annually for the city. Monroe County would also receive about $4 million, with Ellettsville and Stinesville getting smaller shares.
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