Friday, September 13, 2013

Times Argues No More Borrowing Should be Lake County Mantra

From the Northwest Indiana Times:

The budgeting process continues in Lake County, and the Lake County Council is in a unique position this year to go beyond what is expected and pass a budget that includes no further borrowing.

Some County Council members have even expressed an urge -- though fleeting -- to repay a small portion of the $15 million borrowed late last year, reportedly to bridge revenue shortfalls. That should be the new thinking of all council members as we move forward in the new era of a local option income tax.

New income tax revenues will soon be providing the needed boost for funding some federally mandated programs and needed infrastructure improvements. Unfortunately, the council is on a course to spend the rest of the borrowed money as well.

How long before the council spends all of the income tax revenue and borrowed funds and contemplates more borrowing?

It looks as though the county is coming in about $3.5 million short – at least for now – in balancing its budget. Whatever the final “shortfall” ends up being, the county needs to further tighten its belt rather than borrowing to make up the difference. It's what many region families have been doing throughout the great recession and economic recovery.

The council also needs to work out the numbers so some of the previously unspent borrowed money can go back to the bank and stop generating interest for future generations of taxpayers.

Region workers – some of whom continue to struggle to keep their own fiscal houses in order – expect the same of their elected county politicians. They don't expect county department heads to line up for their take of income tax revenue for government employee raises and pension boosts for 2014.

Many taxpayers were incensed with the adoption of the local option income tax. We backed the tax because essential government services faced catastrophe without it. We backed it because it promised property tax relief and because Lake County was the only county in the state not to have adopted such a tax.

Now that our elected leaders have this important funding tool at their disposal, they need to prove they can handle it responsibly and frugally manage the money they have. The mantra going forward should be no more borrowing.