Porter County Commissioner President John Evans, R-North, said last week he was aware of the rumors about interest in a new county income tax, but he and other local officials said they have not taken part in any discussions on the topic and do not see the need at this time for a new tax.
"I think we need to see where the 1-2-3 will leave us," Evans said, referring to the amendment making it unconstitutional for property taxpayers to pay rates higher than 1 percent of assessed value on owner-occupied homes, 2 percent on rental and farm properties and 3 percent on business and industrial properties.
The county is in a strong financial position with the proceeds from the 2007 sale of its hospital, he said. The county had nearly $173 million in proceeds as of late last week, including $11.7 million in interest.
Porter County Council President Dan Whitten, D-at large, said while he is opposed to any new taxes, he believes the financial concerns should be discussed to avoid ending up in place where a tax seems to be the only answer.
"Get in front of it," he said.
The way this will be done is for local units of government to find ways of reducing spending, rather than focusing on new sources of funding, Whitten said. The county and others also need to reconsider their use of tax increment financing districts, which fuels the financial challenges by capturing revenue from new developments at the expense of nearby taxing units, he said.
None of the County Council candidates contacted sees the need for a new local income tax at this time.
Republican Joe Wszolek said cities and towns would be better off looking to increase revenue by attracting economic development and improving their tax collection rates.
Democrat Bob Poparad, who voted against the enactment of the county economic development income tax in 2003, said he supported doubling the rate two years later to 0.5 percent to support the county's participation in the Northwest Indiana Regional Development Authority and to provide property tax relief.
The County Council is key to the question of a new income tax because it has the power to increase the existing tax rate and/or enact a new adjusted gross income tax, said Bob Lain, assistant director of the tax and revenue division at the Indiana State Budget Agency.
The third income tax available to Indiana counties - county option income tax - must be approved by a council composed of county and municipal officials sharing 100 votes based on their populations, Lain said.
Portage Mayor James Snyder said he took over his post just six months ago and is not pursing a new tax.
"I believe we have plenty of fat to cut," he said. "This is what we are focused on here at Portage City Hall."
Valparaiso Mayor Jon Costas said the city is taking in quite a bit less property and income tax money than just a few years ago but has a rainy day fund of almost $6 million.
The city also has had success obtaining grants and is seeing an increase in building permits, which can help offset losses resulting from the tax caps, he said.
"We feel pretty confident we'll be able to weather this storm," he said.