By John Byrne, Post-Tribune staff writer
INDIANAPOLIS -- Lake County's new special income tax distribution came into clearer focus Wednesday thanks to a report detailing how the money would be distributed throughout the county.
The county must adopt a 1 percent income tax and use it for property tax relief, or the county's property tax levies will remain frozen.
The General Assembly has given Lake County -- the only county in the state without an income tax-- three distribution options: Keep the income tax revenue in the municipality where it is raised, use the funds solely to decrease the county government property tax levy or distribute 60 percent of the funds where they are raised and the other 40 percent to municipalities based on population.
Lake County financial consultant Crowe Chizek crunched the numbers on how the more than $70 million that a 1 percent income tax would raise would be distributed under each.
The 60-40 option seems to benefit north Lake County communities more, with Gary, Hammond and East Chicago seeing the greatest surplus in property tax relief compared to what their residents pay in income tax.
The county levy option favors communities away from the lake. Center and Ross townships are the biggest winners.
The third option by definition keeps most of the money where it's raised.
Currently the bill does not allow the County Council to decide which types of property tax payers receive the relief. It would be distributed equally among homes, businesses, rental properties and agricultural land.
But Senate Tax Committee Chairman Luke Kenley said Wednesday he would be amenable to amending the bill this session so the county can opt to direct the revenue to particular types of property.
Whatever options the Lake County Council has for distributing the tax revenue, it may not have the votes to enact it.
Councilman Tom O'Donnell, D-Dyer, a key vote if the council is to overcome a promised veto by the county commissioners, said his constituents are strongly opposed to the income tax.
"People just don't want it, and until we start showing some initiative to make some serious budget cuts ourselves, I can't support it," O'Donnell said.
Councilman Ted Bilski, another potential swing vote, said he too expects to again say no.
"I represent communities that are running pretty lean, frugal operations," Bilski said. "Asking homeowners living in my district to shoulder another tax burden right now doesn't make sense."
Bilski said he would revisit the income tax question if elected officials in the communities he represents tell him they need the revenue.