Hammond mayor swaps income tax support for a budget scalpel

BY BILL DOLAN, Times of Northwest Indiana
bdolan@nwitimes.com

HAMMOND | Mayor Thomas McDermott Jr. is finished trying to push a county income tax on an unwilling public to save city government from millions of dollars in budget cuts, he told The Times.

"I have always maintained the local-option income tax would benefit Hammond under almost every different scenario," McDermott said. "But am I going to keep on cheerleading the tax? No. After the last election, I realize what the public wants. They don't want this."

Lake County Councilman Ted Bilski, D-Hobart, who opposes an income tax as unfair to his district, welcomed the mayor's change of heart.

"Good for him," Bilski said. "He and other municipal officials are seriously looking at how to cut their budgets now."

The mayor said this week he and some Hammond City Council members are working out a formula for employee layoffs and shifting casino revenue from capital projects to squeeze future city budgets through once tax cap legislation goes into effect. The measure will require the city to reduce property tax bills an estimated $9 million by 2010.

"Hammond has always been on the cutting edge of government since I've been the mayor, and we are not shrinking away from House Bill 1001," McDermott said. "We will do what we have to do to meet the letter of the law. That is a good deal for our homeowners."

Until last month, McDermott and other big-city mayors lobbied the Lake County Council to enact a 1 percent personal income tax that would generate $86.6 million countywide.

It could have been divided up among cities and towns facing similar property tax shortfalls because of House Bill 1001, which next year begins capping individual tax bills at from 1 percent to 3 percent of assessed value.

Last year, McDermott won re-election by a razor-thin, 487-vote majority, and the County Council couldn't muster enough votes to pass an income tax. County officials predict the same deadlock remains.

"The fact about a county-option income tax is that it isn't going to happen," McDermott said. "So I'm backing away from that. If others want this tax, they are going to have to put their heads on the chopping block. I've already done it.

"Layoffs are definitely part of the equation in Hammond. I've had good meetings with individual council members, and we have some real good ideas going around."

County Councilman Larry Blanchard, R-Crown Point, another income tax opponent, said Friday, "I'll be glad to not be getting pressure from the mayor, but I wish he opposed it for the same reason I do. It's inequitable."