Welfare program takeover added to tax relief mix for Lake and Porter County

BY PATRICK GUINANE, Times of Northwest Indiana
pguinane@nwitimes.com

INDIANAPOLIS | State lawmakers revealed a couple of new puzzle pieces Monday that might reshape the property tax relief picture for the region.

Hospital Care for the Indigent -- a $25.5 million albatross for Lake County taxpayers -- could be part of a final package of local expenses shifted to state government.

State Sen. Luke Kenley, R-Noblesville, told colleagues that picking up the statewide tab for the welfare program -- commonly known as HCI -- could replace a separate push to assume $120 million in school pension costs.

"If you were to move away from the pension bond pickup -- and maybe move to HCI, which is a continuing problem at the state level -- maybe those are better ways to distribute this," Kenley said.

Porter County pays about $1 million a year into the state-run welfare program. But Lake County property taxpayers shoulder 40 percent of the statewide cost of providing hospital care for the poor, so Kenley's suggestion was met with enthusiasm from local officials.

"It would be a nice savings for taxpayers overall," said Lake County Councilman Larry Blanchard, R-Crown Point.

"It's really an unconstitutional tax right now," added Lake County Commissioner Gerry Scheub, D-Schererville. "If they don't do it, shame on them."

Kenley's comments came as Indiana House and Senate conferees met for the second time to hash out details of a final accord on legislation to ease property taxes. Lawmakers want to tap a penny sales tax hike, from 6 percent to 7 percent, to shift about $1 billion in local costs to state, but they are haggling over which programs to pick up.

Negotiators also must decide how to mitigate potentially crippling local government spending cuts in Lake, Marion and St. Joseph counties -- nearly $400 million combined -- that would be forced by Gov. Mitch Daniels' plan to limit tax bills to 1 percent of assessed value for homeowners, 2 percent for landlords and 3 percent for businesses.

Kenley said the mitigation work could be left to a state appeals board that would be created to hear cries for help from local governments set to lose at least 5 percent of their budgets to the proposed caps. That would include a long list of Lake County cites headlined by East Chicago, Gary, Hammond and Whiting.

The state appeals panel would have the power to delay local implementation of the tax caps for a few years, a move state Sen. Frank Mrvan, D-Hammond, predicted would not sit well with Lake County homeowners.