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Taxapyers

Taxpayers line up to make payments in 2017 at the Lake County treasurer's office.

The city of Gary remains the property tax rate capital of Indiana.

The Indiana Department of Local Government Finance recently released the 2019 annual budget for all 50 of Lake County's taxing districts.

Gary's rate is more than 43 percent higher than any other tax rates in Lake County, more than double the highest rates in Porter and LaPorte counties and more than three times the average tax rate for all of Indiana's 2,057 community, school and other special tax districts.

The state's database indicates Gary has the highest rate in Indiana for the seventh year in a row.

The rates, recalculated annually to bill about 240,000 parcels of residential and business real estate across the county, are all over the map.

They are down from the previous year for Cedar Lake, most of Crown Point, Hammond, Highland, Lake Station, Lowell, Merrillville, Munster, New Chicago and Schneider.

Hammond's rate, which is set this year at $5.16 per $100 assessed value, is a 10 percent reduction from last year. Heather Garay, Hammond chief financial official, said the city has beaten down its tax rate by cutting spending across the board, and is reaping the benefits of projects that is growing the city's assessed value and tax base.

She said improvement in parks and park trails and the 12-year-old College Bound program that provides up to $10,500 annually for students who meet eligibility requirements, has encouraged residents to state and improve the value of their homes.

Rates are up in Dyer, East Chicago, Griffith, most of Gary, Hobart, most of St. John, Schererville, Whiting and Winfield.

Rates in unincorporated Calumet and St. John townships are up. The rest of the county outside city and town limits is down or virtually unchanged.

This year, the tax bills for most homes and businesses in the Steel City will be calculated at $7.97 for every $100 assessed real estate value, according to the Indiana Department of Local Government Finance.

Property tax rates are a measure of the financial burden county government, cities, towns, townships, schools and public utilities place on property owners to finance police, road maintenance, garbage collection and host of other social services.

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Purdue University professor Larry DeBoer, a specialist in local government finance and taxes, said Gary's high tax rate is a sign its depressed economy struggles to fund the high cost of social services for the city's impoverished residents.

Gary faces a triple threat — declining property values, tax caps and ruinously low tax collections.

The city's total assessed value has declined by 17 percent over the past decade, reducing the economic base from which taxes can be drawn.

Indiana's circuit breaker system has capped taxes Gary can bill its property owners since 2010, reducing city revenue by millions of dollars.

The state has answered Gary's petitions for more revenue by jacking up its tax levy — the total amount of taxes it can bill residents — and its tax rates for the past decade.

But that was no cure for the inability or refusal of Gary property owners to pay their tax bills.

The city's residents are paying 60 percent of their tax obligations, in contrast to a nearly 100 percent tax collection rate in Lake outside of Gary, Lake County Auditor John Petalas said.

Last year, Gary adopted a $54 million budget, but could only collect about $30 million in property taxes, according to the county auditor's office.

"The solution is to grow assessed value. But that is going to be tough with a tax rate at $8," DeBoer said. "A tax rate isn't the only influence on new development, but it is  a huge red flag. (Gary's is) already the highest in the state by a long way."

Mike Wieser, director of finance for the county auditor's office, said the rates fluctuate year-to-year based on increases or deceases in a community's assessed value and public spending by county, city, town, township, school and other local government officials.

He said the increases in Gary, Hammond and East Chicago are unlikely to raise their residents property tax bills because tax rates are so high they fall under the protection of the state's circuit breaker system.

It caps the taxes that can be collected from any parcel of real estate at 1 percent of a home's assessed value before deductions, 2 percent for farms and rental housing and 3 percent for business.

He said changes outside those three cities will have little impact on this year's tax bills for owners whose properties assessed values are unchanged.

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Lake County Reporter

Bill has reported in Lake County since 1972 after graduating from Indiana University. He has worked for The Times since 1997, covering the courts and local government during much of his tenure. Born and raised in New Albany, Ind., he is a native Hoosier.