The issue:
State leaders are pressuring counties to impose a new income tax for property tax relief. Jasper County recently passed a 1 percent income tax for property tax relief, a 0.3 percent tax to cover future growth in local operating budgets and a 0.25 percent public safety tax.
Legislators gave Lake County, the only Indiana county without an income tax, until Oct. 1 to pass a 1 percent income tax or face $15 million in spending cuts next year. Lake was the only county strapped with the legislative mandate
INDIANAPOLIS | While Lake County has yet to play its hand in an income-tax showdown with the state, nearby Jasper County decided to go all in.
It's a difference in political and economic cultures, showing the stark divide between Lake and much of the rest of the state when it comes to options for property tax relief.
The Jasper County Council has adopted all three of the new income tax options the General Assembly laid on the table in the spring as methods for lessening the burden of property taxes. The property tax relief bounty there will be split among all taxpayers, including farmers, landlords and businesses.
"We're a rural community, and we felt like everyone should share," said Jasper County Council President James Adamson. "Whether you're a homeowner, a farm owner or what, everybody will get a certain percent of their taxes reduced."
But not everyone in Lake County sees a 1 percent income tax as equitable to all communities in the county.
Jasper County Commissioner Kendell Culp said the new 1 percent income tax the county adopted should cut property tax bills by an average of 21 percent.
The General Assembly this spring gave Lake County a tough pill to swallow: pass a 1 percent income tax for property tax relief or cities, libraries and other local taxing units must forfeit $15 million in tax revenue next year.
The problem, local leaders say, is that the distribution formula for the $80 million in income tax proceeds would force suburban taxpayers to subsidize unchecked spending in East Chicago, Gary and Hammond.
Despite repeated prodding from state officials, Lake County is now the lone Indiana county without an income tax. But David Bottorff, executive director of the Association of Indiana Counties, doesn't fault Lake County leaders.
"It's not like they haven't considered it and done their homework," Bottorff said. "They know what it does to their citizens, they know what happens with the tax levies and where the income tax money comes from -- and where it's going to be spent."
And they don't like it.
"If that could get reworked, and it was truly for property tax relief for everybody, it might be more palatable," said Lake County Councilman Tom O'Donnell, D-Dyer.
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