By Bill Dolan, Times of Northwest Indiana
bill.dolan@nwi.com
MERRILLVILLE | Though larger region cities have seemingly had the biggest voice in the effects of state tax caps on municipal budgets, smaller communities are far from immune to the crisis, local leaders say.
Big city mayors, including Rudy Clay in Gary, have complained loudly in recent months about the prospect of cutting public services because of dropping revenues brought on by state legislative property tax reforms.
However, state Rep. Chet Dobis said he fears Merrillville, a community of more than 31,000, may have to shut its Town Hall doors by late fall for lack of cash after speaking recently with town officials.
Jim Bennett, fiscal consultant to the town, confirmed the future is dire.
"Merrillville has a cash problem, and they need to cut expenses," Bennett said. "They are in a position where they are going to have to do some dramatic things later this year, or they will run out of money. And there are no places to borrow it."
Merrillville Town Councilman Shawn Pettit said the town isn't on the verge of bankruptcy or about to lay off town employees yet. But he said the municipality needs help either from the Lake County Council, which has refused to pass a local income tax to shore the funding gap, or the state Legislature, which has frozen the county's property tax levies.
"We need a new funding source, a new influx of money," Pettit said.
Bennett said Merrillville is not alone.
"I do work for a number of communities, and almost every one of them faces this," Bennett said.
New Chicago Town Councilman Roger Pelfrey said his small berg is feeling the sting.
"We are borrowing money from our water department to keep the town afloat, and the water works is just about broke now," Pelfrey said. "We won't have enough money to go to the end of the year, and how we are going to pay our employees I have no idea."
Bennett said New Chicago and other communities with municipal water and sewer departments can use the money collected in user fees to offset late or missing tax revenues, but Merrillville doesn't have either life line.
The Lake County Council debated a local income tax last month, but County Council President Larry Blanchard, an income tax opponent, said he isn't scheduling any vote on the matter.