From the Northwest Indiana Times:
Lake County officials insist a local income tax scheduled for a vote Monday would bring property tax relief — but not to all and not a dollar-for-dollar reduction.
The Lake County Council, scheduled to meet at 4:30 p.m. Monday in the Syd Garner Auditorium of the Lake County Government Complex, is revising its income tax ordinances to spread reductions in property tax rates to homeowners, farmers, landlords and businesses.
The pledge of at least $90 million in property tax relief is the sugar to entice county residents and out-of-state residents working in Lake County to swallow the bitter 1.5 percent tax on their personal incomes.
That promise is under attack by Eric Krieg, a Republican activist who argues the newest version tax relief is a shell game.
"This is a huge bailout for the cities and to a lesser extent to the towns," Krieg argues.
Mike Wieser, director of finance for the Lake County auditor's office, and Dante Rondelli, finance director for the County Council, said the updated tax ordinance contains property tax relief.
But there are important caveats.
Few if any property owners in East Chicago, Gary, Hammond and Lake Station will see reductions in their bills, but their municipal officials will get a small windfall in income tax revenue to replace property tax revenue they've lost over recent years, county officials said.
The rest of the county's property owners are more likely to see some relief, but the lack of local experience in assessing and distributing local income tax revenues and the variegated tax geography of the county prevent them from making a definitive prediction of who will get how much.
"Those communities at or below the tax caps, their taxpayers will see some degree of relief," Rondelli said. "But there is no way they are going to get dollar-for-dollar relief."
County officials concede the ultimate mission of the income tax is to raise more money for local government, not just swap one tax for another.
"It depends on the individual property's assessed value, the tax rate and the deductions they already receive like circuit breaker, disability or old age," Wieser said. "Each will get the same rate reduction, but they may or may not see a bottom-line change. It's very convoluted."
Lake County has been in tax turmoil for more than a decade following state legislation that shifted the property tax burden of supporting county, municipal and other forms of local government from business to homeowners.
Homeowners demanding relief got the circuit breaker, a system of tax caps that limit how many tax dollars can be extracted from any single piece of real estate.
Last year alone, caps denied local government almost $120 million in potential taxes that stayed in the pockets of property owners, according to the Legislative Service Agency that researches tax issues for the General Assembly.
The caps combined with the lingering economic downturn and a six-year, stated-mandated freeze in property tax growth, prompting the Lake County Council into the April 9 approval — on first reading — of a 1.5 percent income tax.
If the tax passes on second reading Monday, it moves before the Lake County Board of Commissioners, where a veto is promised. If vetoed, the tax would die, unless the council can muster a super majority of five votes to override it.
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See the full article here:
http://www.nwitimes.com/news/local/lake/lake-income-tax-vaguely-promises-property-tax-relief/article_936de980-3b82-5c17-b07e-126ffe56197e.html
