Porter income tax pinch less than predicted
By Amy Lavalley Post-Tribune correspondent August 16, 2014 10:48AM
Updated: September 18, 2014 6:20AM
VALPARAISO — Porter County is not being hit as hard by Lake County’s new income tax as originally feared.
Lake County passed the 1.5 percent county economic development income tax in May 2013. If someone lived in Lake County, which didn’t have the tax, but worked in Porter County, which has the tax, the tax was collected for Porter County and distributed to the county and its municipalities.
Once the tax kicked in for Lake County residents, that money disappeared from the coffers of Porter County and its municipalities.
Auditor Bob Wichlinski projected at the time that Porter County would lose about $1.6 million a year in CEDIT revenue.
According to the Indiana State Budget Agency, the drop for 2015 is estimated at $528,517. That amount will be finalized in the coming weeks.
“I was being very, very conservative,” Wichlinski said, adding projections and actual revenue were so far apart for a few years that payments from the state were suspended.
The entire county will get an estimate of almost $22.7 million for the coming year, a drop of 2.3 percent from 2014.
The money, Wichlinski said, will be split in half, with about $11.3 million being divvied up between the county and its municipalities based on population. Of the remaining funds, $3.5 million will go to the Regional Development Authority and the rest will be used for homestead credits.
“It’s encouraging,” Wichlinski said. “It’s not as bad as it could have been. It’s still going to be a hit, but it’s not as bad as it could have been.”
Wichlinski speculated that Porter County may not have been hit as hard by Lake County’s new tax because residents here could be earning more, boosting how much is collected.
Money collected through CEDIT is cyclical and goes back up with wages, said County Council President Dan Whitten, D-At-large.
The news is particularly good as the council moves into budget hearings, which start next month. The county is facing ongoing budget constraints, and a projected shortfall of $8 million for next year.
The county is cutting department budgets by 10 percent and taking bids for health insurance in an attempt to lower costs, as well as moving forward with investing almost $160 million in proceeds from the sale of the county hospital to generate revenue, Whitten said.
“We’re going to be fine. The sky is not falling,” he said