INDIANAPOLIS | A House-Senate conference committee, made up mostly of Northwest Indiana lawmakers, remained far apart Tuesday following more than an hour of discussion on whether the General Assembly should lift the Lake County property tax levy freeze.
State Rep. Hal Slager, R-Schererville, insisted that any compromise version of Senate Bill 585 include a House-approved provision deleting the law that limits the total tax revenue, known as the levy, of all local governments in Lake County to their 2007 amounts as punishment for the county not enacting an income tax.
"We should not be in the business of withholding taxpayer money as a penalty to do what we think they should be doing," Slager said. "They have to answer to their voters and constituents and will do so accordingly."
State Rep. Ed Soliday, R-Valparaiso, appeared to agree with Slager.
But the committee Democrats, including state Reps. Charlie Brown, D-Gary, and Shelli VanDenburgh, D-Crown Point; and state Sens. Earline Rogers, D-Gary, and Lonnie Randolph, D-East Chicago, were united against thawing the levy freeze.
They argued that since the County Council is on the verge of approving an income tax, which will lift the levy freeze automatically so long as the rate is at least 1 percent and most of the revenue is used for property tax relief, the Legislature shouldn't throw them a last-minute curveball.
"We ought to allow Lake County to do what other counties do: be responsible for passing a tax and deciding what the distribution of that tax will be," Rogers said.
Rick Cockrum, lobbyist for the Lake County council and commissioners, told the committee that deleting the levy freeze endangers months of "tenuous" negotiations on the income tax issue and could reset the process to square one.
At stake in the debate is millions of tax dollars and lots of potential partisan blame for tax hikes.
VanDenburgh said she's received letters from Republican constituents urging her to support lifting the levy freeze because it will negate the need for the Democratic-controlled council to enact an income tax.
She said that argument is incorrect because unfreezing the levy will generate only about $4 million in new revenue and the county needs much more to repay the $15 million it borrowed to cover operating costs this year and for future needs.
A 1 percent income tax would generate about $96 million a year.
State Sen. Ed Charbonneau, R-Valparaiso, the conference committee chairman, said he was uncommitted on the levy freeze and will continue trying to work out a compromise before the Legislature adjourns for the year on or before Monday.
He is allowed to bring back Senate-approved provisions removed by the House capping Lake's income tax and directing how the money can be spent.
Charbonneau, Soliday, Rogers and Brown must sign off on any compromise before the measure can advance to the full House and Senate for final votes.
If needed, leaders of the Republican-controlled chambers have been known to replace obstinate conference committee members to move legislation toward passage.
Several region economic development provisions are also part of the legislation, including a new Gary airport board, the transfer of funds from the Gary Sanitary District to the city of Gary, and studies of the need for a port and trauma hospital in Gary and whether the Port of Indiana should pay Portage for municipal services.
Charbonneau said he believes no changes are needed to the House-approved versions of those items. However, the failure to settle on a tax compromise could prevent them from becoming law.
Soliday said he's begun looking for other legislation still moving through the process that could become homes for the non-controversial economic development proposals.