The Porter County Council office received data from the Indiana Department of Revenue Tuesday indicating that the impact of the new Lake County local income tax will short Porter County taxing units roughly $1 million per year in county economic development income tax (CEDIT), starting sometime after 2014.
That figure differs from an earlier estimate that came out of the County Auditor’s office late last week, saying that the pinch felt would be close to $1.66 million, based on employment statistics from the U.S. Department of Labor.
A deputy director with the Indiana DOR pulled their data from the tax records they have for Lake County residents working in Porter County. According to the data, in the 2012 tax year, 5,907 workers from Lake County generated $1,145,417 in CEDIT revenue.
In 2011, 5,611 workers produced $1,026,841 in CEDIT comparable to 2010 when 5,477 workers paid $953,399 in CEDIT.
The way Porter County’s CEDIT is set up, half of its’ distribution is shared among county government and the municipalities for projects while the other half pays the county’s share of $3.5 million due each year to the Northwest Indiana Regional Development Authority. Any remainder goes to property tax relief.
Now that Lake County will have its own income tax, Lake County residents who work in Porter County will no longer pay income tax to Porter County, which has had CEDIT in place for a number of years. Those workers will now have 1.5 percent of their paychecks go to Lake County government units starting on October 1.
Porter County government will see the largest difference since it receives the largest CEDIT share of 42 percent, followed by Portage which receives 22 percent, Valparaiso at 19 percent, Chesterton at 8 percent, Porter with 3 percent, and Burns Harbor at about .7 percent.
The County Council’s financial specialist Vicki Urbanik said when you take half of the $1,145,417 in CEDIT for 2012 and multiply it by the 42 percent share that Porter County Government receives, the loss there would have been $240,538.
For Portage, the loss would have been $125,996 in 2012 CEDIT, $108,815 for Valparaiso, $45,817 for Chesterton, $17,181 for Porter, and $4,009 for Burns Harbor.
Urbanik said that the figures are preliminary as she is still waiting to hear back from the DOR on a few more points of inquiry. Once the amounts are accurately tabulated, she will provide reports to the Council as well as to the municipalities.
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