Lake County Council slams plan to cut business personal property tax
By Carrie Napoleon Post-Tribune correspondent January 14, 2014 6:24PM
Updated: February 17, 2014 8:05AM
CROWN POINT — Lake County officials say they are overwhelmingly opposed to any change in legislation that would eliminate or reduce the business personal property tax.
Democrats and Republicans on the Lake County Council unanimously approved a resolution Tuesday against the move by the state legislature and took turns discussing their reasons.
Lake County taxing bodies stand to lose a combined $115 million in business personal property tax. About $17 million of that would be revenues headed for county government.
Councilman Dan Dernulc, R-Highland, said that is just too much money to pull from the county’s budget.
Dernulc said while he believes good economic development is based on small businesses this is not the way.
“I do believe they need some assistance, but blanket elimination (of the tax) is ridiculous,” Dernulc said.
Allowing counties to decide for themselves whether or not to eliminate the tax would create an unfair business environment in those counties, like Lake, that cannot afford to do so, he said.
However, removing the tax would potentially place the tax burden back on homeowners and that could run between $500 and $1,000 per family.
Councilman Jerome Prince, D-Gary, said officials would have three options if the business personal property tax is eliminated: increasing the income tax, increasing property taxes or increasing other fees.
“The income tax is the least secure form of revenue,” Prince said, adding he does not agree with the actions by the state that aim to move funding government toward less secure sources of revenue.
Council President Ted Bilski, D-Hobart, said all businesses, including small businesses and farmers, would be seeing some tax relief this year now that the county has passed the 1.5 percent income tax package.
Property taxes are expected to drop by about 25 percent in areas, such as south Lake County, not impacted by the circuit breakers.
Councilman David Hamm, D-Hammond, said businesses received a break when the property tax caps were adopted by referendum.
Eliminating or reducing the business personal property tax would shift even more of the tax burden to homeowners and individuals.
Prince added businesses take many factors into consideration when choosing where to locate.
Quality of life issues such as good schools often are as important as financial considerations.
Eliminating or reducing the business personal property tax would not only affect local governments but schools as well since they too rely on tax dollars.
“It seems counterproductive,” Prince said.