CROWN POINT | The Lake County income tax will reach deeper into local pockets than first thought, generating millions more in local government revenues and property tax relief.
Lake County Council President Ted Bilski, D-Hobart, said the state's newest estimate of income tax to be collected from county residents and workers has risen to more than $145 million. The revenue will be shared among government officials, who will spend it on government services, and private property owners, who will see property-tax reductions.
That is $10 million more than estimated last spring. The increase represents a more accurate measure of the county's personal income levels.
The tax rate remains the same since May 6 when the seven-member council enacted three taxes totaling a 1.5 percent levy on personal income.
A 0.25 percent Public Safety Income Tax and a 0.25 percent County Economic Development Income Tax each will cost local residents and workers about $24.3 million, or about $3 million more than earlier estimates. It will be split among 19 cities and towns and county government.
The 1 percent County Adjusted Gross Income Tax will amount to $97 million a year, about $7 million more than earlier estimated. Bilski said that money is earmarked for property-tax relief, although other county officials said some of it likely will pad the big city budgets instead.
The public safety and economic development tax dollars will be distributed among the 19 cities and towns and county government and used to augment police, fire and other essential government services.
The County Adjusted Gross Income Tax revenue is earmarked to reduce property taxes.
However, tens of thousands of homeowners and businesses, primarily in East Chicago, Gary, Hammond and Lake Station already receive all the property tax relief allowed under the so-called state circuit breaker system, which caps the taxes imposed on any single parcel per year.
Their property-tax relief dollars will go directly into local government coffers.
Although local governments will start receiving a substantial share of their income tax revenues this coming January, the bulk of the money won't be available to them or to property owners as property tax relief until 2015.