VALPARAISO | Porter County stands to lose as much as $1.66 million in income tax revenue when neighboring Lake County implements its own income tax.
The loss will come as Lake County residents, who work in Porter County, begin paying the income tax back home rather than in Porter County, according to data collected last week from the Porter County auditor's office.
There were 8,504 Lake County employees working in Porter County in 2011 with annual earnings of nearly $332 million, according to the data. Lake County residents make up the largest share of nonresident employees in Porter County, followed by workers from LaPorte County.
Half of Porter County's income tax distribution for this year or $10.8 million is shared by the county and various municipalities based on population, while the remaining half is dedicated to property tax relief ($7.3 million) and to cover the county's $3.5 million annual dues for participation in the Northwest Indiana Regional Development Authority, according to the auditor's figures.
The looming loss of income tax revenue concerns Porter County Councilman Jim Biggs, R-1st, who said the county has been collecting less than it spends on reoccurring costs, despite reducing spending by 5 percent last year.
"This is exactly why several members of the council have been so steadfast in our unwillingness to incur recurring operating costs," he said.
Biggs and other council members led a budget battle last year that resulted in the smaller of the two budgets for 2013. But it lacked raises for county employees and funding for big ticket items such as round-the-clock medical service at the jail, the opening of the third pod at the jail and long-term funding for E-911.
Biggs called again Friday on the Porter County Board of Commissioners to initiate a comprehensive operations plan to identify the county's capital needs, such as new buildings and renovations, for the next three to five years. The county can't continue making decisions on major projects without fulling understanding the ramifications, he said.
He pointed out the ongoing water infiltration repair work at the county's Memorial Opera House in downtown Valparaiso has reached $315,000 and was initiated as an emergency project, despite funds being set aside a year earlier for major maintenance work that was never done.
Porter County Commissioner Nancy Adams, R-Center, said work has started on a comprehensive operations plan, but that will have to be accelerated as a result of Friday's news about Lake County's new income tax.
She said Porter County is going to have to adjust to the loss of revenue and tighten its belt.
The county faces increasing costs, such as a greater burden on its probation department, as a result of the state's first update in decades to its criminal law.
"There's a lot of things we need to think about," she said.