The Northwest Indiana Regional Development Authority would get a $4 million budget bump under a plan to fix an income tax break aimed at Lake County's poorest homeowners but claimed by many more.
The Lake County Residential Property Tax Credit annually returns $300 to 29,700 county property owners who earn less than $18,000 a year.
It was enacted in 2001 to help low-income homeowners cope with rising property taxes following a tax overhaul that shifted much of the business tax burden on to homeowners.
However, last year some 13,400 homeowners whose total incomes topped $18,000 received the credit, because under the law, "earned income" does not include most investment or retirement income. At least 23 households with incomes of more than $500,000 got the $300 refund.
State Sen. Ed Charbonneau, R-Valparaiso, proposed in Senate Bill 383 to close that loophole, saving $4 million a year in tax credits that are paid from casino admission tax revenue that otherwise would go to Hammond, East Chicago, Gary and Lake County.
His idea was incorporated Thursday into Senate Bill 367, sponsored by state Sen. Brandt Hershman, R-Buck Creek. But instead of the money returning to the casino cities and Lake County, it would be paid to the RDA — a change Charbonneau supports.
"There's general agreement that the RDA is a good thing, it's really an economic development driver for Northwest Indiana, and we've been looking for ways to fund it," Charbonneau said. "It is a very painless way to get $4 million to the RDA."
The revised proposal was approved by the Senate Appropriations Committee and now goes to the full Senate, where lawmakers will consider additional changes next week.
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