Residents told income tax, budget cuts both needed
HIGHLAND — County officials have three options if the proposed 1.5 percent income tax does not pass: drastic cuts, bankruptcy or more borrowing — a step described as “fiscal suicide,” Lake County Council’s financial expert says.
Dante Rondelli, the council’s financial adviser, warned residents gathered Saturday at the Lincoln Center in Highland for an informational forum on the tax hosted by Lake County Councilwoman Christine Cid, D-East Chicago, that if they oppose the 1.5 percent income tax they should be prepared for what will come if that tax is not passed.
“This is not a threat. This is what’s going to happen,” Rondelli said of the three options county officials will be left with if the tax does not pass.
Cid called the forum to provide information about the tax, what kind of income would be taxed, how the revenues would be distributed and who might benefit from the property tax relief the tax will generate. She was joined by Republican Councilmen Eldon Strong, R-Crown Point, and Daniel Dernulc, R-Highland.
Together the three voted against the tax package, a 1 percent tax that would go toward property tax relief, a 0.25 percent public safety tax that can be used for things including the consolidated 911 and a 0.25 percent county economic development tax that can be used for a variety of general fund purposes.
“We have cut. There are things we can still do,” Cid said. “What are you willing to do without?”
County Council has reduced its budget by 20 percent since 2008 and eliminated more than 300 jobs. Rondelli said Council President Ted Bilski on Monday instructed him to create a scenario for cutting 30 percent across the board from every budget in case the tax does not pass.
Strong and Dernulc have presented a five-point package of cuts they said they would like to see implemented before county officials enact a tax.
When asked if he had a chance to crunch the numbers regarding the five-point plan, Rondelli said it would not be enough.
“In my opinion the five-point plan will not satisfy the amount needed to balance the budget,” Rondelli said, adding nor will the tax alone. He said the county will need to enact both cuts and the tax to bridge the $15 million gap in 2014.
East Chicago City Council President Gilda Orange, in the audience along with Mayor Anthony Copeland, said she can see both the need for the tax and the financial burden it will create for residents throughout the county. Orange said she fears 1.5 percent will just be the beginning with residents facing an income tax rate that will quickly climb.
“I’m torn. I know East Chicago needs a lot of help. I know the constituents do not want another tax. People are really struggling,” Orange said.
Calli Puotra-Aldrin of Hammond said she can find evidence of assets being wasted when she walks into some departments and sees flat-screen computer monitors with no employees in front of them. She said maybe the cuts discussed by Rondelli are needed.
“I don’t necessarily think it’s a bad thing,” she said.
Highland resident Greg Kuzmar said creating a new revenue source before all the cuts that can be made have been made would be a mistake.
“Once you pass the tax what is the impetus at that point to make those cuts,” he asked.
About 75 residents attended the forum, the vast majority of which seemed opposed to the tax. They encouraged Cid, the lone Democrat on the County Council opposing the tax, to stand her ground and continue to vote against the tax.
The Lake County Council — in a special meeting at 4:30 p.m. Monday in the Syd Garner Auditorium at the Lake County Government Center in Crown Point — is expected to call the ordinance creating the tax for a second reading. The ordinances are expected to pass the second reading 4-3. The Lake County Board of Commissioners will conduct a special meeting at 8:30 a.m. Friday in the auditorium where they are expected to veto the tax.
The vote will return to the council for an override, where five votes will be needed to pass the tax. Cid is the lynch-pin vote.
“I still have a lot to think about,” Cid said. “If I had to vote today I’d be voting no.”