BY PATRICK GUINANE, Times of Northwest Indiana
[email protected]

INDIANAPOLIS | The push to extend South Shore service to Lowell and Valparaiso could hit Northwest Indiana residents in the paycheck -- or at the fuel pump.

After a proposed $50 annual vehicle registration fee to finance the commuter rail expansion hit a legislative roadblock last spring, supporters now are considering Lake and Porter County income taxes, as well a regional fuel tax.

"The wheel tax was brought up last session; it may not be the most equitable funding source," said state Sen. Karen Tallian, D-Ogden Dunes. "We have also discussed a possible income tax. There could be some combination."

Local legislators kept those options close to the vest Monday until after a legislative hearing on the $1 billion rail expansion, which needs roughly $30 million a year in local funding to move forward. Some members of the Commission on State Tax Fiscal Policy appeared to grow frustrated with the tight-lipped responses they got from South Shore supporters.

"What is the (funding) source?" state Rep. Jeff Espich, R-Uniondale, asked impatiently. "Maybe you don't want to talk about it."

State Rep. Chet Dobis, the Merrillville Democrat who proposed the $50 wheel tax this spring, insisted "everything is on the table" as local lawmakers search for a way to raise the $350 million that will be needed over 25 years.

After the hearing, state Rep. Ed Soliday, R-Valparaiso, suggested a 2-cent fuel tax increase for Lake and Porter counties could finance the project while tapping Illinois motorists who cross the state line in search of cheap gas.

"I'm not completely closed to a fuel tax; they're just hard to get through the Legislature," he said. "A fuel tax of 2 cents a gallon -- that will encourage (region residents who commute to) Illinois to ride the train. ... If you don't like the gas tax, ride the train."

Proponents plan to spend the coming months building support for a South Shore financing plan that would go before the General Assembly next year. The final proposal could tap different funding sources in each county.

"Lake and Porter counties are very different," Soliday said. "Porter County isn't using all its economic development funds. They might just use some of the (income tax) they've already got."

A Times review last month showed Porter County communities spent income tax proceeds on lawn mowers, copiers and other mundane purchases. Legislators could move to redirect those funds, which are intended for economic development, to the South Shore expansion.

The project has the potential to create 26,000 jobs, mitigate traffic congestion and tailpipe emissions, and spur economic development in southern Lake and Porter counties, veteran U.S. Rep. Pete Visclosky, D-Ind., told the commission Monday in his first appearance before a state legislative panel.

Still, some lawmakers questioned whether local leaders could coalesce around a potential tax increase of $30 million a year.

"Do you think that there is sufficient local support for a taxing vehicle of this magnitude, no matter what it is?" asked state Sen. Brandt Hershman, R-Wheatfield.

"It is incumbent upon us to lead and to stress to our constituency that it is our interest to make the investment in our future," Visclosky said. "Shame on us if we can't lead a little bit and convince them that this is in our interest ... and I'm convinced our constituency is going to buy into that message and help themselves create a better future."
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