VALPARAISO | Government in Porter County and its 11 local cities and towns is going to receive significantly less revenue this year from the local income tax.
The 20 percent cut is the result of a rise in unemployment that has accompanied the economic downturn during the past few years, said Dan Bastin, settlement director at the Indiana state auditor's office.
This loss of revenue has occurred across the state and has had an effect for some time on state government, which receives its funding long before the local units, he said.
The local income tax is collected two years before it is distributed, Bastin said. This lag in distribution means the counties can expect at least another year of reduced revenue.
Porter County is slated to receive a total of $17.3 million in local income tax revenue this year, as compared to $21.6 million in 2010, $23.7 million in 2009 and $19.5 million in 2008, according to state figures.
Of that revenue total, $8.6 million will be shared by the county and various municipalities based on population. The other half is dedicated to property tax relief -- $5.1 million -- and to cover the county's $3.5 million annual dues for participation in the Northwest Indiana Regional Development Authority.
County government will take the biggest individual hit this year, with its distribution shrinking $905,843 to $3.6 million.
County Commissioner John Evans said the majority of the funding is left unallocated and is spent on an as-needed basis.
Portage officials have some budget cutting ahead. The city planned to receive a little more than $2 million but will receive $1.9 million, or $494,801 less than last year.
Clerk-Treasurer Donna Pappas said $775,000 was budgeted for landfill costs this year, $595,000 to pay off debt, $561,058 for equipment purchases and $132,000 for leases.
Valparaiso Clerk-Treasurer Sharon Swihart said her city's loss of $405,165 is buffered somewhat by the fact the city doesn't rely on any of the money for operational costs.
"It's always been for special projects," she said. "We'll do less special projects."
The same is not the case in the town of Chesterton, which depends on the distribution to pay for all but $5,000 of the salary and benefits of Town Manager Bernie Doyle, Clerk-Treasurer Gayle Polakowski said.
The town's share of the revenue, which will be reduced this year by $154,928, also is used for grant matching and roadwork, she said.
Polakowski said she and other town officials will be meeting this month to address the revenue loss.