Impact of Jail Consolidation on County LD 1 Limits

The recent corrections consolidation law (Public Law 2008, Chapter 653) changed the way counties will calculate their LD 1 assessment limits. From now on, county expenditures are effectively separated into two categories: corrections-related and non-corrections-related. The law froze the amount of corrections-related assessments that each county may raise (the exact dollar amount for each county is listed in statute - see page 4 of the PDF version of the full law available online:

The law did not freeze the amount of non-corrections related assessments that each county may raise. Those may grow at a rate equal to the standard LD 1 growth limitation factor (countywide property growth plus statewide income growth). Essentially the new law shrinks the base from which the assessment limit is calculated. Before it was calculated on both corrections- and non-corrections-expenditures. Now it is only based on non-corrections expenditures.

For example, say last year a county raised $1 million for corrections-related expenses and $2 million for non-corrections-related expenses. Its total assessment was $3 million. The new law freezes the amount of corrections-related assessments the county may raise this year at $1 million but allows the non-corrections expenses to grow at the county’s standard LD 1 limit, say 5%. Five percent of $2 million is $100,000. The new total assessment limit would be $1 million plus $2 million plus $100,000, or $3,100,000. (Before, the limit would have been calculated on the entire $3 million assessment. A 5% limit would have increased the total allowable assessments to $3,150,000.)