By John Byrne, Post-Tribune staff writer
GARY -- Local state legislators hope Gary's worsening financial plight will convince their counterparts elsewhere in Indiana to consider some kind of a special bailout for the beleaguered city.
"That's the silver lining in this dark cloud," said State Sen. Earline Rogers, D-Gary. "There's no better way to show lawmakers from around the state the special circumstances Gary deals with than to ask them to look at the current fiscal situation."
Gary faces an imminent $13 million budget shortfall, according to Mayor Rudy Clay. He estimates the city could be bankrupt by early October if drastic cost cutting isn't enacted.
State Rep. Charlie Brown, D-Gary, said now is the time for local officials to press the case to downstate Republicans that Gary needs a special dispensation.
But he said Clay needs to be more inclusive as the city faces the financial crisis.
"I would love to be the town crier for Gary around the state, making the case for the city, but unfortunately I don't have the information on the city's financial situation that I would need to do that effectively," Brown said. "The mayor needs to involve the rest of us."
And legislative leaders may not be easily amenable to giving Lake County's biggest city additional relief from the state's new tax structure.
Sen. Luke Kenley, R-Noblesville, pointed out the tax cap package the General Assembly passed this spring exempts Lake County from the full brunt of property tax caps until 2020.
With that in mind, Kenley, one of the state legislature's financial wise men, said he's loathe to consider revising public law 1858.
The 2003 statute has allowed the steel mills and the BP refinery in Lake County to greatly reduce their share of the property tax burden by lowering the assessed value of their equipment. County officials frequently cite 1858 when lamenting budget problems in the area.
"I would think (1858) is a dead end and a dead horse, and I would not be interested in revisiting that," Kenley said.
Ryan Kitchell, director of the state Office of Management and Budget, argued the financial troubles now afflicting Gary are due to a confluence of factors not related to actions taken recently by Gov. Mitch Daniels.
"I can see the argument being made that this year's property tax levy has been frozen because of no local income tax, but that certainly wasn't driven by the governor," Kitchell said.
Looking ahead to 2009 budgets, when state-mandated property tax caps will begin to take effect, Kitchell said Gary officials should prepare to make their case to the state's Distressed Unit Appeal Board as a first step to alleviating their financial woes.