CROWN POINT | The Lake County Council is borrowing, rather than taxing, its way to a balanced 2013 budget.
But as money pressures mount and its membership changes, so may its opposition to a local income tax.
A personal income tax on county residents and workers may be repugnant and should be a last resort, but may be inevitable, according to candidates for two council seats being given up by two tax opponents.
Lake County officials have been in defiance of a 2007 state law that imposed a property tax levy freeze five years ago. Downstate Republican legislators insist the law is meant to cure the county's over-reliance on property taxes, which burden business development.
The law's tax freeze will continue denying local government millions of dollars in potential revenue unless the county moves to a local income tax.
Despite rumors earlier this year the county would cave in and pass the tax, County Council members restated their opposition last summer, saying the tax, which exempts business income, would be unfair to working men and women who bear its full weight.
However, the council is confronted with ever-declining property tax revenue driven by a combination of the the levy freeze, a circuit breaker system placing additional limits on tax collections and a depressed real estate market resulting in lower assessments of property wealth on which taxes can be drawn.
The Lake Council Council opted against cutting more deeply into county government spending where 75 cents of every dollar is tied up in maintaining public safety through police, the jail and courts.
Instead, it borrowed $15 million to make ends meet next year and has left unanswered what happens in the coming years.
State Rep. Mara Candelaria Reardon, D-Munster, said she cannot predict the Republican-dominated legislature that put the law on the books will now let Lake off the hook.
"The law has led to some positive changes in terms of spending cuts at the county level that wouldn't have taken place had they not been boxed into a corner," Candelaria Reardon said.
"But we might be hitting a wall over what more might be cut without impacting the citizenry. They aren't allowing Lake County to capture their growth since 2006. That's pretty harsh. Maybe they will see we have made a good-faith effort, but there was no will to do anything about it last year," she said.
While the state Legislature may appear unbending, the County Council will look different in 2013.
Rick Niemeyer resigned from the council last week to become a state legislator and Councilman Mike Repay, D-Hammond, must vacate his seat next month to become a member of the Lake County Board of Commissioners.
Both Niemeyer and Repay opposed an income tax.
David Hamm, a former Hammond city councilman and fire chief, expressed his interest in filling Repay's spot. He said he believes passing a local income tax is an option that should remain on the table. He said the tax probably is unavoidable.
Hammond City Councilman Bob Markovich said if he decides to run for Repay's seat, he would oppose an income tax.
Republican James Cuffia and Eldon Strong have indicated they will seek Niemeyer's council seat.
Cuffia said of a local income tax, "I am adamantly opposed to it. I think there are other options available, especially with the election of Hal Slager and Rick Niemeyer to the state legislature. With Rick having served on the County Council, he should be able to let them know we need solutions other than increasing the income tax."
Strong's opposition to an income tax is not absolute.
"I don't support any tax increases, and borrowing money to make your budget means having to pay back with interest. You are just digging a bigger hole. Quit digging.
"We have to continue to trim until we get rid of what is unnecessary. Then we have to look (at a tax). We might not have to do it then. There are some other things that could be done first," Strong said.
Larry Blanchard, a former county councilman, said he will decide this weekend whether to run for the council again. He voted against the income tax in 2007, but added, "Under certain conditions, I could support it," he said.
He said that would include a guarantee of fair distribution of income tax dollars earmarked for property tax relief.