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Porter County a loser thanks to new Lake County tax

Bob Poparad.  | Provided Photo~Sun-Times Media

Bob Poparad. | Provided Photo~Sun-Times Media

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Updated: June 13, 2013 6:51PM



VALPARAISO — Lake County taxpayers won’t be the only ones hit in the wallet by their new 1.5 percent income tax.

Porter County will feel the pinch as well, as Auditor Bob Wichlinski estimates that, conservatively, the tax will cost the county more than $1.6 million annually in county economic development income tax, or CEDIT, funds.

“Lake County’s failure to raise its taxes helped out Porter County,” he said Friday, hours after the Lake County Board of Commissioners failed to veto the Lake County Council’s passage of the tax, which takes effect Oct. 1.

If someone lived in Lake County, which hasn’t had the tax, but worked in Porter County, which does have the tax, the tax was collected for Porter County and distributed to the county and its municipalities.

Now that Lake County is getting the tax, Wichlinski said, the money will be collected for that county from folks who work in Porter County.

“Our projection was, that’s about $1.6 million a year less in CEDIT revenue,” based on employment projections from the U.S. Department of Labor, Wichlinski said.

Porter County is receiving $21.6 million in CEDIT money this year. Of that, $3.5 million goes to the Regional Development Authority and the rest is for the county and its municipalities.

Because of the way the tax is collected and distributed, money collected from Lake County in the last months of this year won’t be distributed until 2015. Porter County won’t feel the squeeze until 2016, after the tax is collected for a full year in Lake County in 2014.

Porter County Council President Bob Poparad, D-At-large, said that it might be premature to put a figure on the loss, because the state’s Department of Revenue hasn’t yet looked at the impact on Porter County.

A representative from the department said she expected to have more information on the matter next week.

The drop in CEDIT revenue, which is used for everything from drainage projects to basic building maintenance, will still be felt eventually.

“There’s no denying it,” Poparad said. “There will be a decrease in how much money we’ll receive. All the municipal bodies will suffer a decrease. That number is the missing link.”



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