Bill would require RDA to spend money on Lake Co. transportation projects

2014-02-20T17:30:00Z 2014-02-21T12:01:06Z Bill would require RDA to spend money on Lake Co. transportation projectsKeith Benman and Dan Carden Times Staff Writers
February 20, 2014 5:30 pm  • 

The $4 million in annual savings expected from a legislative plan to close a Lake County tax loophole may be used to fund expanding the South Shore Line.

But Hammond Mayor Thomas McDermott Jr. is blasting a state legislative proposal to direct $4 million more in casino funds to the Northwest Indiana Regional Development Authority, saying the money rightfully belongs to local communities.

Senate Bill 367 in the Indiana General Assembly closes a tax loophole that allows people with significant investment income in Lake County to claim a tax credit designed to help low-income homeowners. The money comes from money casinos hand over for local economic development.

"The fact they are stealing this money from Lake County communities, I'm incensed over it," McDermott said Thursday.

The plan to fix the tax credit so it benefits only low-income homeowners has widespread support among state legislators and local officials.

However, the plan to give the $4 million the proposal frees up to the RDA has split Northwest Indiana's delegation in the General Assembly.

McDermott has called for a meeting of the legislative committee he chairs at the Northwestern Indiana Regional Planning Commission to consider taking a stand at 1 p.m. Feb. 28 at NIRPC headquarters in Portage.

The RDA has pledged to use the $4 million to support a South Shore extension to Dyer. The RDA also is asking local communities throughout Lake County to contribute a portion of their receipts from the new Lake County Economic Development Income Tax to help fund the building of the South Shore extension.

Currently, SB 367 directs that money to the RDA without mandating a specific use.

State Rep. Mara Candelaria Reardon, D-Munster, said Thursday when the House Ways and Means Committee reviews the legislation Monday, she will ask that the RDA be required to spend the money on "the transportation needs of Lake County."

The money would help backers of a South Shore expansion get closer to reaching the local match required to obtain federal funds for the planned extension of the commuter rail line to Dyer.

The Senate-approved legislation adjusts the Lake County Residential Property Tax Credit to ensure only homeowners with less than $18,000 in total income claim the $300 credit intended to help low-income homeowners with their property taxes.

Last year some 13,400 homeowners whose incomes topped $18,000 received the credit because the current income definition does not include most investment or retirement income. At least 23 households with incomes of more than $500,000 got the $300 refund.

The tax credit is paid by the state, which deducts the cost of the credit from casino admission tax revenue that otherwise would go to Hammond, East Chicago, Gary and Lake County.

McDermott pointed out Hammond, East Chicago and Gary already each contribute $3.5 million yearly to the RDA. He said SB 367 means Hammond basically would be ponying up $600,000 more for the RDA.

"I've basically been elected to represent 80,000 people in Hammond, Ind., and make decisions about Hammond finances," McDermott said. "This is absolutely our money. It belongs to the cities that have gaming boats."

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