INDIANAPOLIS | The Indiana House has agreed to remove a state-imposed limit on the amount of property tax revenue local governments in Lake County can collect, regardless of whether the county enacts an income tax.
The General Assembly in 2007 punished Lake County for being the lone holdout refusing to impose a county income tax. The punishment included not allowing local governments in the county to take in more money than they received that year until the county enacted at least a 1 percent income tax, an action known as the levy freeze.
As a result, Lake County as well as its city, town and township governments have been forced to cut their spending by a combined 17 percent, according to state Rep. Rick Niemeyer, R-Lowell.
During House debate Wednesday on Senate Bill 585, state Rep. Hal Slager, R-Schererville, persuaded the Republican-controlled chamber that it's wrong for the state to dictate to local governments what taxes they should charge.
"Who in this room really cares whether or not Lake County imposes a tax or not; it's their business," Slager said. "Why do we want to compel someone to impose a tax?"
Under questioning by state Rep. Charlie Brown, D-Gary, Slager said he's not trying to derail the County Council's upcoming second vote for an income tax, he just wants the levy freeze removed even if the income tax attempt fails.
Brown and state Rep. Shelli VanDenburgh, D-Crown Point, urged representatives to reject Slager's proposal because it may cause the council to give up on enacting an income tax.
"They need to implement the tax so the taxpayers in our county can receive $22,500,000 in property tax relief," VanDenburgh said. "It seems so backwards, you have to implement a tax to give people relief, but it's the right thing to do and we're very close."
The House approved Slager's proposal on a voice vote.
The legislation also was changed to remove a proposed governor's veto over Gary airport board appointments.
Instead, the airport board member appointed by the governor will be board chairman, and the governor will get no say in the members appointed by Gary, Lake County and Porter County officials.
The House is set for a final vote on the revised measure Thursday or Monday.
The Senate must agree to the House changes or send the proposal to a House-Senate conference committee before it can go to the governor.