What happened
A Lake County delegation opposed to a local income tax received a sometimes chilly reception from legislative fiscal leaders in Indianapolis. Little progress was made on the legislative mandate handed down this spring, which will force local governments to forfeit a combined $15 million in new revenue next year if the Lake County Council doesn't impose a 1 percent income tax dedicated to property tax relief. Legislators say the tax, which would raise roughly $80 million, would allow the county to cut homeowner tax bills by 40 percent. But local officials dispute the figures, arguing they would have to assign some of the relief to landlords, dropping the overall tax cut to about 20 percent.
INDIANAPOLIS | Lake County officials butted heads Monday with legislative fiscal leaders, including a co-architect of the income tax mandate that has roiled region tempers.
The roughly 90-minute exchange with the Commission on State Tax and Financing Policy was tense -- even confrontational at times -- but local officials returned home clutching a few rays of hope.
While lawmakers continued to defend spring legislation prodding Lake County to impose a 1 percent income tax dedicated to property tax relief, they listened to Highland Councilman Joseph Wszolek's suggestions for more equitably distributing the $80 million in proceeds. Wszolek said the income tax money should first be used to absorb countywide property tax levies, a move that would distribute relief more evenly among communities.
Meanwhile, state Rep. Bill Crawford, an influential Indianapolis Democrat, said he was impressed by Lake County Commissioner Roosevelt Allen Jr.'s oratorical assault on a 2003 state law that gave huge tax breaks to big industry.
"The legislation has caused a lot of hardship for the people of Lake County," Allen said of House Bill 1858, which dramatically lowered property taxes on machinery and equipment for BP, Mittal Steel and U.S. Steel.
Allen said the tax cuts made sense when the mills were battling bankruptcy -- but not now amid soaring stock prices. Crawford conceded lawmakers might have been "remiss" in not including an expiration date on the 2003 law, and he advised Allen to continue the discussion with region legislators.
But in a meeting showcasing the distrust that typically clouds interactions between Lake County and the Legislature, the local delegation made little headway on the income tax mandate.
One senator wanted to know how local communities spent every cent of riverboat casino subsidies, but county officials only prepared an account of their $17 million annual share. And state Sen. Luke Kenley, the Noblesville Republican who helped craft the mandate approved this spring, continued to argue that an income tax would help spur economic development.
"Many of us are going to be hard-pressed to feel sorry for your plight, if you will, until you (adopt an income tax) as other counties have done," said state Rep. Jeff Espich, R-Uniondale.
Kenley quipped that "it must've been fun" for Highland officials to craft an anti-income tax resolution that says the Legislature "cynically singled out" one county for "taxation without representation" through a measure that "patently violates" the Indiana Constitution.
The local delegation, including Lake County Council President Elsie Franklin and county Councilman Larry Blanchard, focused on the distribution formula, which they say would unfairly steer suburban income tax dollars to the northern cities.
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