INDIANAPOLIS | Lake and Porter County drivers would pay a new tax of up to $50 a year under the latest plan to finance expansion of South Shore service to Lowell and Valparaiso.
Region economic development officials for months have suggested that county-level incomes taxes or a local levy on bar and restaurant tabs could be needed to help cover the $1 billion cost of expanding rail service through southern Lake and Porter counties.
The new financing plan hatched Tuesday by state Rep. Chet Dobis, D-Merrillville, instead relies on a so-called wheel tax that region motorists would pay as part of their annual license-plate renewal fees.
A Senate fiscal panel entertained the concept Tuesday but didn't take a vote, and it's unclear if Dobis can sew up support for the tax before lawmakers adjourn April 29.
"My objective was to germinate the idea and see if it can catch on this session," Dobis said.
State law already permits local vehicle taxes of up to $25, but Lake and Porter are not among the more than three-dozen counties that impose the levy. Dobis' plan would bypass county officials, instead giving the Northwest Indiana Regional Development Authority power to impose a single rate of up to $50 a year on motorists in Lake and Porter counties.
"I have serious concerns about allowing a non-elected board to impose any kind of tax," said state Rep. Dan Stevenson, D-Highland.
Other lawmakers, including some from outside the region, also questioned the wisdom of turning taxing authority over to the RDA board, which is appointed by county officials, mayors and the governor. Dobis acknowledged the "bone of contention" but suggested the scenario is no different than non-elected school boards that lord over multimillion-dollar construction projects.
Fellow Northwest Indiana legislators were quick to praise Dobis' leadership on the South Shore issue. But while embracing the opportunity for debate, they weren't ready to greet the vehicle tax with open arms.
"I know people are opposed to tax increases," said state Sen. Sue Landske, R-Cedar Lake. "But this kind of idea will get the discussion going."
Others, including state Vic Heinold, R-Kouts, and Reps. Duane Cheney, D-Portage, and Ed Soliday, R-Valporaiso, indicated they are wiling to look at ideas to fund South Shore expansion. But the said it's too early to endorse a specific tax.
The proposal would not give the RDA taxing authority until after federal matching funds have been secured for the rail project. Dobis argues lawmakers should act soon to take advantage of the appropriations clout that U.S. Rep. Pete Viscloskly, D-Merrillville, has while Democrats control Congress.
RDA executive director Tim Sanders said he wasn't familiar with Dobis' plan, though the agency has said that the South Shore plan would need additional funding from state or local officials. The RDA's strategic plan suggests $18 million a year would be required to finance bonds to cover half the cost of the $1 billion project.
