Lake County Council members divided on local income tax

2013-04-04T18:30:00Z 2013-04-05T10:07:07Z Lake County Council members divided on local income taxBill Dolan bill.dolan@nwi.com, (219) 662-5328 nwitimes.com
April 04, 2013 6:30 pm  • 

CROWN POINT | Lake County Council members brought talk of a local income tax into the open, but there remains a question about whether there are enough votes among them to adopt it.

The seven-member body has to muster at least four votes to pass a tax and at least five votes to override a veto by the Board of Commissioners to enact three separate taxes that would add up to a 1.5 percent tax on personal income of county residents and workers.

Councilmen Ted Bilski, D-Hobart, Dave Hamm, D-Hammond, and Jerome Prince, D-Gary, spoke favorably of the tax that would generate more than $90 million in additional revenue to bail local government out of either cutting services or increasing debt.

Councilmen Dan Dernulc, R-Highland, and Eldon Strong, R-Crown Point, said a new tax was unnecessary and that they prefer cost-cutting measures instead.

Councilwoman Christine Cid, D-East Chicago, said, "I can't say I'm in favor of it ... but I'm definitely in consideration of it."

Cid said she intends to hold public forums in her district to consult with her constituents.

Councilwoman Elsie Franklin, D-Gary, wasn't present for Thursday's debate. She underwent surgery in late February after suffering chest pains.

Bilski said he cannot guarantee whether Franklin will be present for any votes, though he hopes she will be.

The first of several votes needed for approval of a tax is likely to take place at the council's regular meeting at 10 a.m. Tuesday in the Lake County Government Complex auditorium. Bilski said he hopes a final vote will take place within a month.

Lake is the only county in the state that hasn't adopted a local income tax and is being punished for its refusal by the General Assembly, which has frozen the total amount of property taxes, called a levy, collected annually since 2007.

Lake County officials previously have opposed such an income tax as unfair to working people, because business income is exempt.

Bilski said county, municipal, school and township government units in Lake County have lost tens of millions of dollars in recent years because of a series of state-inspired tax breaks for business and the so-called circuit breaker that caps the amount of taxes that can be collected on any single property.

Bilski said most of the income tax would be dedicated to reducing property taxes under a formula in which communities that pay the most income tax would receive the most property tax relief.

Prince and Cid said county government has shed hundreds of jobs, cut its property tax levy and was still forced to borrow $15 million to confront cost increases beyond its control.

Strong suggested that instead of an income tax, county officials reimpose a hiring freeze, put all service contracts worth more than $50,000 up for competitive bidding, establish a uniform job classification and salary system and close the three northern satellite courthouses.

Prince said Strong's suggestions are valid, but questioned whether they would generate the millions of dollars needed to fill local governments' budget gap.

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