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

CROWN POINT | The Lake County Council adopted a historic budget that reduces property taxes and includes the possibility of a local income tax in 2009.

The seven-member board voted unanimously Tuesday night to subtract $15 million from this year's spending by eliminating 112 county government jobs.

The council gave 170 county police officers a 3 percent increase and set aside $1.5 million to be divided up as one-time bonuses for most of county government's 2,000 employees whose salaries have been frozen the last two years.

Council members said bonuses for the employees are justified because they will have to assume more work because of the smaller payroll.

"This will be the first year I can recall we actually worked below the previous year's job (budget)," said Councilman Larry Blanchard, R-Crown Point, who has served on the council since 1994.

"We have a balanced budget and a cushion" that he said should eliminate any need to approve a county income tax.

County government will cost property owners roughly 56 cents for every $100 of assessed value on homes, farms, industries and small businesses for a total of $125.8 million -- $6.1 million less than this year's tax draw.

County government spending used to increase by as much as 5 percent annually since the early 1970s.

That changed last year when the state froze the county's property tax collections as punishment for refusing to approve an income tax. County officials feel that tax is unfair because business income is excluded.

A downstate taxpayer's revolt earlier this year galvanized Gov. Mitch Daniels and the Legislature to cap the total amount of taxes any individual must pay on their home or business.

The caps will reduce revenue to cities, towns, townships and county agencies, forcing the council to adjust its spending downward.

The council offered incentives for early retirement, imposed a hiring freeze and consolidated document printing and business machine purchases to achieve bulk discounts.

After 14 workshop meetings, the council still had $2.8 million to cut Tuesday night.

It found half that amount by eliminating contributions to employees' individual retirement accounts. They also cut jobs in the parks department and filled the final gap by assuming government user fees for electronic court paper filings and sheriff services will make up the difference.