INDIANAPOLIS | A powerful state senator has threatened to eliminate the $10 million in annual state funding for the Northwest Indiana Regional Development Authority unless Lake County enacts an income tax.
State Sen. Luke Kenley, R-Noblesville, chairman of the Senate Appropriations Committee, said it's not fair that Hoosiers living in 91 of the state's 92 counties impose a local income tax — yet subsidize region projects — when Lake County won't even tax its own residents to meet local needs.
"We're getting down to the point where we can't just keep saying, 'OK, we'll give you another five years of subsidies,' or something like that," Kenley said.
The state share of RDA funding is paid by proceeds from the 2006 lease of the Indiana Toll Road. However, that money is set to run out at the end of the 2015 budget year.
RDA President Bill Hanna met with the State Budget Committee on Tuesday to lay the groundwork for state funding beyond 2015. He said an interruption could delay work on RDA projects and reminded the fact-finding committee that the RDA has produced $1.1 billion in economic impact over the past seven years, or $5.11 for every dollar spent.
"We are approaching this from an investment standpoint," Hanna said. "We have special opportunities to produce new value for the state of Indiana."
Kenley remained skeptical. He suggested it might be better to have the Legislature approve funding for region projects on a case-by-case basis instead of supporting the RDA.
"We've kind of pushed this money at you for your own discretionary use with some positive effects ... but I think we're really not doing anything like this for anybody else," Kenley said.
At that, state Sen. Karen Tallian, D-Ogden Dunes, nearly jumped out of her chair to point out the billions of state dollars spent on Indianapolis projects, including sports stadiums, parks and other non-government buildings.
"There does come a time when you can't take every request from Lake County for whatever and say, 'Well you don't have a county option income tax.' That can't be the answer to every single thing," Tallian said. "Lake and Porter County enterprises support a lot of other things that go on in this state."
The RDA was created by the General Assembly in 2005 to improve the lakefront, Gary/Chicago International Airport, Northwest Indiana's transit connections and to support economic development in Lake and Porter counties.
In addition to the state's $10 million annual share, Lake County, Porter County, Hammond, Gary and East Chicago each pay $3.5 million a year to fund the RDA.