Northeast Indiana counties try to cope as revenue shrivels up

By Benjamin Lanka, The Journal Gazette

blanka@jg.net

As communities struggle to make their budgets work under the state's new tax laws, at least one northeast Indiana county appears ready to raise taxes.

The state lowered property tax bills by about a third statewide partly by increasing the sales tax to 7 percent. The plan also caps the amount of property taxes local governments can collect but gives them the option of raising income taxes to help offset revenue losses.

The Huntington County Council on Monday is scheduled to discuss, and likely vote on, increasing its local income tax. A study done by a consultant for the county recommends between a 0.8 percent and 1 percent tax increase, but officials said nothing has been decided. If a 1 percent increase were approved, it would cost people $1 for every $100 they earn, but some of that extra money would further reduce property tax bills. Huntington County residents currently pay a 1.25 percent income tax.