CROWN POINT | Lake County's plummeting home values are contributing to county government's expected $20 million budget deficit next year.
Lake County Assessor Hank Adams told a workshop meeting of the County Council on Tuesday residential real estate plummeted across the county, but nowhere as deep as Gary, where home values dropped 74 percent between 2004 and last year, according to Greater Northwest Indiana Association of Realtors data.
Times staff writer Keith Benman reported the decline in home values earlier this summer.
Adams said houses dropped 65 percent in East Chicago, 48 percent in Hammond, 22 percent in Merrillville and 15 percent in St. John recently, too. The communities with the least reductions were Highland, with only an 8 percent downturn, and Crown Point and Schererville at only 7 percent.
Adams said these lower real estate values translate into fewer taxes to fund government services under the state's circuit-breaker system.
He said lower values push local tax rates higher if local government doesn't reduce spending. Higher tax rates push taxes up, but no higher than an individual's home at 1 percent of its assessed value, 2 percent for farms and rental housing and 3 percent for business and industry.
Every dollar protected by the circuit-breaker system is lost to city, town, township and county government.
Council members continued talking Tuesday about borrowing money to close the budget gap but reached no consensus on what to do other than appoint a committee of Councilman Ted Bilski, D-Hobart; Councilman Dan Dernulc, R-Highland; and Councilwoman Elsie Franklin, D-Gary, to suggest concrete action on the deficit.
Bilski warned, "We are going to have to create a new revenue source." Council members have been hinting the revenue may have to come from a county income tax.
The council voted Tuesday to add nearly $100,000 in red ink to the budget by approving pay raises for the sheriff, the chief public defender and a number of court probation officers.
Council members said they were forced to do so by a state mandate and may remove a similar amount of money from those people's departmental budgets to balance the ledger.
The council deferred a decision on whether to let the county assessor control how to spend $560,000 earmarked for tax reassessment or divide up the money among the township assessors.