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New funding options for county correctional and rehabilitation facilities

For most communities, a big part of the budget process is prioritizing where the money should go. Sadly, the funds available usually run out before the needs.

This year, legislation was amended that provides some help for counties funding expenses related to correctional and rehabilitation facilities. Under the legislation, county fiscal bodies are permitted to adopt an ordinance to impose (within the local income tax expenditure rate) a tax rate to assist with funding expenses related to correctional facilities and rehabilitation facilities in the county. The tax rate, which must be in increments of one-hundredth of one percent (0.01%) and may not exceed two-tenths of one percent (0.2%), may not be in effect for more than twenty (20) years.  In addition, the revenue generated by such a tax rate (1) must be distributed directly to the county before the remainder of the expenditure rate revenue is distributed; and (2) shall be maintained in a separate dedicated county fund and used by the county only for paying for correctional facilities and rehabilitation facilities expenses in the county.

There are advantages and disadvantages to adopting this new legislation.  It is important to carefully evaluate the option and determine if it is best for your county.

For more information on this topic, or to learn how Baker Tilly municipal specialists can help, contact our team.

Baker Tilly Municipal Advisors, LLC is a registered municipal advisor and wholly-owned subsidiary of Baker Tilly US, LLP, an accounting firm. Baker Tilly US, LLP, trading as Baker Tilly, is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities.

The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax advice, if any, contained in this communication was not intended or written to be used by any taxpayer for the purpose of avoiding penalties.

Jason G. Semler
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