Municipal and real estate leaders in the region hope a recently approved Illinois income tax hike is enough to push residents tired of more taxation over the state line.
Indiana already ranks as one of the top four states where Illinois residents go when they move out, according to data from the Illinois Policy Institute.
Earlier this month, Illinois lawmakers and Gov. Pat Quinn increased the individual income tax from 3 to 5 percent and the corporate rate from 4.8 to 7 percent.
Peter Novak, chief executive officer of the Greater Northwest Indiana Association of Realtors, said a marketing campaign to attract Illinois residents should be rolled out, educating people about Northwest Indiana. Efforts aimed at luring Illinois businesses have been under way for years and expect a boost from the tax hike.
Whoever has a vested interest should combine their money and make a pitch to individual residents, Novak said.
Talks are under way, Hammond Mayor Thomas McDermott Jr. said. "It's definitely something that we as a region, or state as a whole, should think about," he said.
Hammond has been on the receiving end of former Illinois residents for more than a decade, and this is another reason for them to move into the city, he said.
"The fact is there's been a migration now for at least the last 10 years, and we're the first stop," McDermott said. "I think this is going to increase the migration. And we're always looking to increase the number of homeowners in the city of Hammond."
Martin Egan, owner of tax firm Jackson Hewitt's locations in Highland and Hammond, pointed out that it's not only Illinois residents who will be affected by the income tax increase. Anyone who works in Illinois, including Indiana residents who commute, will pay the extra taxes.
"It's not a matter of where you live; it's where you work," he said.
Novak said the decision to move goes beyond dollars and cents. Quality of life is a factor, he said.
St. John Town Manager Steve Kil expects the new Illinois income tax rate will draw residents to town, one of the fastest-growing communities in Lake County. "In my opinion, it's going to have a significant impact on residential construction," he said.
Property taxes have been a driving force over the past two decades, in terms of attracting people from Illinois to Indiana. The 67 percent higher income tax could be enough to push some fence-sitters over the edge, Kil said. "I have a lot of friends who live in Illinois, and they're absolutely furious about this," he said. "For those who can, I think the move they are going to make is across the border. The only mitigating factor is whether they can sell their existing home."
Rick Eberly, interim town manager, zoning administrator and redevelopment director for Dyer, isn't as convinced. Historically, it has been the difference in property tax rates and, to a lesser degree, sales tax rates that attracted people from Illinois to live in Indiana.
"Real estate prices have typically been lower in Indiana as well, and those three factors continue to be the same, so I don't think that an income tax hike will do much to spur or slow down the migration from Illinois," Eberly said. "I just don't think it would do that, in and of itself. Maybe the layering effect, but not just because of an income tax."