From the Northwest Indiana Times:
An Indiana University
professor says better money management by Lake County's big cities would help
the suburbs, too.
"There is a need
for stronger expenditure controls and transparency," Assistant Professor
Justin M. Ross, of the IU School of Public and Environmental Affairs, told the
Lake County Council on Tuesday morning.
Ross said the first
step toward better fiscal government is a deeper understanding by local
government officials of the impact of the state's circuit-breaker system, which
benefits homeowners who might otherwise be overwhelmed by high taxes but
punishes both free-spending big cities and frugal suburban communities alike.
The circuit breaker
prohibits local government from charging little more than 1 percent of the
assessed value of a primary residence, 2 percent of the value of a rental
property or second home and 3 percent of a business's value.
The millions of
dollars taxpayers save are being lost to local government, particularly in
Gary, Hammond, East Chicago and Lake Station. In those cities, high tax rates
result in the circuit breaker vaporizing 4 to 50 percent of their anticipated
property tax levy, Ross said.
But the impact goes
beyond those four cities, because their taxpayers also send fewer dollars to
county government.
The circuit breaker
and other revenue shortfalls prompted the County Council to reduce county
government spending for the last three years and adopt a new tax on the
personal income of all county residents and workers.
Ross estimates county
government still will lose $2 million annually from the circuit breaker and
urges county officials to create and share their own future circuit-breaker
forecasts with neighboring cities, so budget-makers understand the impact their
spending plans have on neighboring communities.
He said the County
Council also may need greater authority from the state Legislature to make
binding recommendations to lower the property tax levy of cities and towns that
exceed their circuit-breaker ceiling.
Ross said local
government should refrain from granting tax breaks or diverting tax dollars
into tax increment finance districts to lure new businesses into their
community, because these incentives also lower tax revenue across the county.
He said County Council
members should be armed with at least three years of past spending trends to
improve their ability to foresee next year's spending needs.
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