Lake County Council passes income tax on first reading

2013-04-09T12:30:00Z 2013-04-10T14:30:05Z Lake County Council passes income tax on first readingBill Dolan bill.dolan@nwi.com, (219) 662-5328 nwitimes.com
April 09, 2013 12:30 pm  • 

CROWN POINT | Lake County is one step closer to a local income tax.

The Lake County Council approved a 1.5 percent assessment on the personal income of all county residents Tuesday by a 4-3 vote.

Voting in favor were council members David Hamm, D-Hammond; Ted Bilski, D-Hobart; Jerome Prince, D-Gary; and Elsie Franklin, D-Gary. Voting against were Dan Dernulc, R-Highland, and Eldon Strong, R-Crown Point.

Councilwoman Christine Cid, D-East Chicago, voted no, but she represents a potential swing vote.

Cid explained she still is gathering information on the tax and plans to hold a public forum with her constituents before the measure comes up for a second vote. Prince said he has been investigating the tax for years. "I'm ready today," he said.

She complained that many county employees haven't received pay raises in years and taxpayer contributions to their pension fund have been cut as well. She is an employee of the county treasurer's office. She voted for an income tax in 2007.

The other Democrats on the fiscal body voted in favor of the trio of taxes earmarked for property tax relief, public safety and economic development.

They argued the tax is a necessary evil the Republican-dominated state Legislature is imposing on them through a 2007 law that froze the county's property tax levy until the county passed at least a 1 percent income tax.

Council members said their past resistance has been overcome by Republican-inspired state laws that reduced business-related tax revenues that have sustained local government in past years. County officials have shrunken their payrolls by 350 jobs in recent years and are reluctant to slash more.

The two Republican council members who voted against the taxes argued county government spending must shrink further.

The measure is expected to generate more than $90 million that must be shared around the county in the form of property tax credits that would primarily benefit suburban property owners and build local government budgets, primarily those in the county's urban north.

County officials say they need their share to cover the costs of county jail improvements, a consolidated E-911 emergency communications system and long-deferred maintenance of the county's road, bridge and drainage infrastructure.

The council listened to more than an hour of comments from members of the audience including several public officials.

Schererville Town Councilman Jerry Tippy questioned whether an unfrozen property tax levy would generate that much more money.

County officials said all government units in the county could receive an additional $4 million in property taxes and more than $90 million for every 1 percent of income tax enacted.

Hobart City Councilman David Vinzant said he supports an income tax to unfreeze the property tax levy because a lack of new funding has forced his community to forgo paving streets and reduce parks and recreations programs. He said healthy local government protects private property values.

County Commissioner Gerry Scheub, D-Crown Point, repeated his vow to veto the tax if it comes before him this year. He said of the 2007 property tax levy freeze, "The state is an illegal entity forcing an illegal tax on us."

Merrillville Town Councilwoman Chrissy Barron, who supports the tax, said her town no longer can live on the level of property tax revenues that were frozen in 2007. She said the town should hire four additional police officers but cannot afford to.

Other members of the public complained that county officials should be challenging the tax freeze law as unconstitutional special legislation.

Ray Szarmach, legal adviser for the council, said such litigation could cost hundreds of thousands of dollars and the prospects of victory were dim. He said county lawyers tilted against a similar law that disadvantaged county taxpayers years ago, and the Indiana Supreme Court ruled against Lake.

Some complained the county's reputation for public corruption argued against giving elected officials a new tax. Others said a new tax shouldn't be approved until public spending of Lake's current tax revenues is more transparent.

County officials said public budgets can be found online at the Indiana Department of Local Government Finance website at http://www.in.gov/dlgf/; the Indiana Gateway databank at https://gateway.ifionline.org/; or on various locations within the Lake County government website at http://www.lakecountyin.org/.

Council members said they now will step back for several weeks to receive and shape public opinion before taking a second vote. The next scheduled council meeting at which a vote can be taken is 6:30 p.m. May 14.

If passed a second time, the tax proposal goes before the county government's executive branch. Two of the three members of the Board of Commissioners have indicated they would veto the taxes as an unfair imposition on working men and women.

If so, the council would need five votes to override the veto and enact the taxes.

The council attempted to pass an income tax in 2007 but couldn't muster a supermajority to defeat a veto that year.

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