At the December 13, 2021 Council meeting, Village Council voted unanimously to maintain the income tax rate of 0.525% for the 2021 Indian Hill tax return that is due on April 18, 2022.
Throughout each year the Village’s Finance Committee analyzes the overall financial condition of the Village regarding actual and projected revenues, expenditures, and fund balances. The 2021 budget originally estimated income tax receipts to decrease by 20% due to the unknown effects of the COVID-19 pandemic. Actual tax collections came in higher than anticipated, which along with higher estimated fund balances, led to initial discussions to reduce the income tax rate for 2022 (2021 tax filing). However, there were several economic conditions that the Committee considered going into 2022:
- Pandemic related supply chain issues, labor shortages and erratic material costs have caused significant price increases;
- Several capital project bids came in 20-55% higher than engineer estimates at the end of 2021;
- The possibility of a federal multi-trillion infrastructure bill that has the strong ability to increase demand for services while decreasing supply availability and increasing costs;
- Economists’ predictions that inflation will rise throughout 2022;
- Stock market corrections anticipated during 2022
After several months of analysis and discussion, the Finance Committee recommended to maintain the current tax rate. By continuing the tax rate, the Village is better situated to maintain adequate levels of fund balances to mitigate current and future risks (e.g. revenue shortfalls and unanticipated expenditures) and to ensure stable tax rates. With the income tax remaining at 0.525%, budget projections continue to forecast sufficient reserves over the next few years. In addition, the projections account for future known and estimated liabilities, a viable and active ten-year capital improvement program, and cash flow stability.
As with every year, Council will reexamine the income tax rate during this year’s budget preparation process by reviewing actual revenues, expenditures and fund balances.
For questions regarding the tax rate or additional information regarding the 2021 income tax filing season, please do not hesitate to contact Scott Gully, Finance Director/Tax Commissioner, at 513-561-6500.