EDITORIAL: Settle on fair formula for tax revenue

2012-09-12T00:00:00Z EDITORIAL: Settle on fair formula for tax revenue nwitimes.com
September 12, 2012 12:00 am  • 

Lake County stands alone in Indiana as the only county without an optional income tax. Clearly, the pressure is on to adopt one of these taxes.

Until Lake County adopts an income tax, its property tax levy is frozen. That means it can't keep pace with inflation. No other county bears this burden; it is the Indiana General Assembly's way to trying to get Lake County officials to use the help already available before expecting a state handout.

Some Lake County officials have been adamant about their "no new taxes" pledge. Meanwhile, essential government services like public transportation and public safety aren't being adequately funded.

Hobart is the first city to officially ask for a Lake County income tax this year, but it isn't likely to be the last.

The evidence of local government struggling to make ends meet in Lake County, absent the tax every other county has, is clear. Libraries are closing in cities where literacy is a serious problem. Police officers and firefighters aren't getting hired or, worse, being laid off.

Hammond, which was the poster child for how to use casino money effectively, no longer is able to put all its casino revenues into infrastructure and programs like College Bound. Now some of the casino bounty is being tapped for operating expenses.

There has been a lot of fat squeezed out of government in Lake County, and there are examples of where more fat remains. But there are too any examples of local government grasping at straws to make ends meet and costing taxpayers more in the process. 

Lake County officials recently borrowed money to settle lawsuits, and Winfield has borrowed money to pave roads. Not only do taxpayers have to pay for those expenses, but also the interest on the borrowed money. In the case of Winfield's roads, the payments will last longer than the roads themselves.

The existing distribution formula for a county income tax has been contentious, but that need not be the case. All parties in the county must find a way to cooperate and agree on a formula that is fair and that helps all units of local government.

That's the answer that addresses fairness in terms of distribution of the funds collected and the need to continue provide essential services.

Adopting an income tax wouldn't sanction a spending spree. It would, however, take back income tax money left behind by Lake County residents who work in other Hoosier counties. Lake County would get that money instead. Enacting the income tax would thaw the frozen property tax levy. The income tax could fund property tax relief for homeowners.

It's time to discuss the income tax options again and devise a fair distribution formula. At the same time, discuss the proper uses for that money. 

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