Lake County could join state with tax

CROWN POINT, Ind. – The Lake County Council has backed a plan that would make it the last of Indiana’s 92 counties to adopt a local income tax.\nNegotiations are likely to continue, however, since the 4-3 vote on Monday in favor of the proposed 1 percent tax fell short of the five votes that were needed to overcome a threatened veto by the county’s Board of Commissioners.\nCounty and municipal leaders expect meetings before the end of December to work out how to allocate about $78 million in anticipated new tax revenues among the county’s 19 cities and towns and its unincorporated area.\nAll the council members described the income tax as a mandate thrust upon Indiana’s second-most populous county by state officials, who have threatened to freeze the county’s property tax levies at 2007 levels, costing taxing entities about $15 million in 2008.\n“We’ve been told by the leaders in the Senate, ‘If you guys in Lake County don’t adopt this, then don’t expect anything from us in the General Assembly,’” said Councilman Will Smith of Gary.\nTwo of the three councilmen who voted against the tax Monday said they believed a compromise could be reached before the end of the year, following months of disputes over which part of the county will see the greatest benefit from the income tax.\nThe plan approved Monday estimates that Gary property owners would receive some $3 million less in property tax relief than the city’s residents would pay in income taxes.\nGary Mayor Rudy Clay said he would push for changes to the distribution plan.\n“We will keep tweaking this to make the formula more beneficial to Gary,” Clay said. “But now the door is open to bringing property tax relief to the people of Gary and the county.”\nThis year, Southwestern Indiana’s Sullivan County became the 91st county to adopt a local option income tax when officials approved a 0.3 percent tax for economic development efforts.