Lawmakers approve budget, tax relief

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BY PATRICK GUINANE
pguinane@nwitimes.com
317.637.9078 | Monday, April 30, 2007 | (33 comment(s))

INDIANAPOLIS | A last-minute addition to property tax legislation approved late Sunday will force Lake County to impose a 1 percent income tax next year and dedicate all of the resulting proceeds to tax relief for homeowners.

The provision, which only applies to Lake County, was added as lawmakers worked to meet an 11 p.m. deadline to approve a new two-year state budget that provides $500 million in tax relief to homeowners this year and next.

"We're just trying to send a message that we need property tax relief," said Rep. Bob Kuzman, D-Crown Point. "Everybody keeps saying it, and we just put $550 million into it, and we need to see what the locals can do to help out, and this is a way to help out."

If Lake County doesn't approve the 1 percent income tax, which would raise about $76 million, county property tax levies would be frozen, forcing cities, schools and other taxing units to survive without a penny in new spending.

Sen. Luke Kenley, R-Noblesville, said negotiators from both parties agreed it was time to give Lake County a final shove to join Porter and 89 other counties that have some form of income tax.

"We're gonna try to push them to get them in the right position. I think they know that," Kenley said. "There will be political fallout. When you change your tax system, some people are going to be mad."

The income tax requirement is tied to legislation that spends $550 million in tax relief the state will raise by permitting thousands of slot machines at downstate horsetracks.

Several changes to Indiana's property tax system came to a head this year, prompting dire predictions of a 24 percent spike in tax bills homeowners will receive this summer and fall. Property owners will have to pay the exorbitant tabs in full, but the state will spend $300 million to send homeowners partial refund checks around the first of the year.

Counties will be required to mail notices giving legislators credit for the tax breaks, which lawmakers say should drop the average increase in homeowner tax bills to no more than 8 percent.

House Minority Leader Brian Bosma, R-Indianapolis, called the rebates a "harebrained idea" that "helps politicians and not the taxpayers." But, most of all, House Republicans complained it wasn't enough, demanding Democrats cut pet initiatives like full funding of free textbooks to poor children to squeeze out another $100 million in tax relief.

The demand was ignored. And Democrats who control the House spent the day persuading several recalcitrant colleagues to provide the 51 votes that were needed to pass the $26 billion state budget out of the chamber on a party-line vote. Crafted in unison with Senate Republican leadership, the two-year spending plan stays within anticipated revenue growth while providing 3.6 percent average annual funding increases to schools.

Beset by falling enrollment, Gary Community School Corp. is one of only nine Indiana school districts that will see a drop in state support, losing $11 million in tuition dollars by 2009. Rep. Vernon Smith, D-Gary, reluctantly provided the final vote needed to pass the budget.

"I voted for the bill because it's the best I could get," Smith said, fighting tears. "But what we did to Gary Community School Corp. is wrong."

The budget this year became inexorably linked to the property tax plan, which spends another $250 million in slots money in 2008 to ensure homeowners don't face more sticker shock in an election year.

Lawmakers abandoned efforts to shift school and child welfare costs to the state, but they stuck with provisions allowing local officials to freeze property taxes and move future spending growth to county-level income taxes. The legislation, House Bill 1478, also relaxes the circuit breaker for landlords and businesses, a move expected to dramatically reduce the budget shortfalls Lake County cities, schools and other governmental units were expected to face when the tax cap takes full effect in 2010.

On the final day of the session, lawmakers also approved a 44-cent cigarette tax hike to help fund health care for up to 374,000 Hoosiers. The plan was a top priority for Republican Gov. Mitch Daniels, and it raises the tax to 99.5 cents per pack.

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LET'S JUST ADMIT IT!!!! wrote on May 10, 2007 9:43 AM:

" OUR POLITICIANS AND GOVERNMENT IS NOTHING BUT LEGALIZED CRIME GOVERNMENT.... "

the "waiter" wrote on May 5, 2007 8:56 AM:

" what the heck happenned to all that cigarette settlement money a couple years back...giving Indiana politicians money is WORSE than pouring it down a rat hole ... at least you see results when the rat hole fills in ... we get NOTHING for our money in Indiana!!! "

Jimmy wrote on May 3, 2007 4:18 PM:

" "Lawmakers approve budget, tax relief" Can someone please explain to me how taking another percentage of my hard earned money is "tax relief". Morons!!!!!!!! LYING THIEVING POLITICIANS STRIKE AGAIN! "

Joker wrote on May 3, 2007 12:40 PM:

" Hey, apparently somebody has to pay for all the freebies Hammond and Gary are giving away... college tuition, mortgage breaks and incentives, etc... What I'd like to know is what happened to all of the casino money... Anyone? "

Get them out! wrote on May 3, 2007 12:25 PM:

" You all need to remember all this in the papers about the taxes come election day May 8th! It's time for a change in Indiana from the Govenor & Mayor all the way down to the Assessor. Enough is enough, hell the Mayor doesn't care about this City, he is just trying to work his way up to the Senate! We are just a stepping stone for him. VOTE THEM OUT! "

woody wrote on May 3, 2007 7:22 AM:

" enough is enough. I have to pay a tax to save on taxes, makes no sense. Just like the gas stations that have a car wash. Pay $5 for a carwash to save $2 in gas. "

4th cut - City judges wrote on May 2, 2007 11:04 PM:

" BAM! BAM! $ 12M right there "

3rd cut - assessors wrote on May 2, 2007 11:03 PM:

" Bam! $ 15M right there. computers can do their job "

2nd cut - Surveyors Office wrote on May 2, 2007 11:02 PM:

" Bam! $ 10M there "

First cut -- townships wrote on May 2, 2007 11:01 PM:

" Bam! 20M per year right there. "

LAWSUIT LAWSUIT wrote on May 2, 2007 11:00 PM:

" C'mon! Somebody can get it started. The new forced income tax has to be unconstitutional. We elect County politicians to enact policies that represent Lake County residents (voters). I suspect that the new "extortion" law would fail the stink test in court. Just like the previous assessment system failed due to the inequity of it overall. Any non Democrat, non Lake County connected lawyers out there looking for a career building challenge? "

CL wrote on May 2, 2007 8:13 PM:

" This is a wolf in sheep's clothing! Just what we all need - another tax. This "fix" will eventually lead to not only higher property taxes later, but also higher county income tax. Remember, taxes don't decrease and they never disappear!! It's time to cut social programs, so the working man can keep some of his pay! Vote 'em ALL out! "

Liz wrote on May 1, 2007 4:03 PM:

" Yeah, here we go again!!! Another tax! I am already paying two state income taxes. One to Illinois, and one to Indiana. Mayor Daley has also floated the idea of taxing all of us commuters who come into Chicago to work... Let's see, then there's the wheel tax to fund the South Shore....local income tax option...hmm..when is all this taxation going to end? I feel like I should quit my job and go on welfare just to get away from all of these taxes. "

Wm. Weissbeck wrote on May 1, 2007 2:09 PM:

" Do I get this right - central Lake Co. gets to pay income taxes to fund relief for northern Lake, while nothing was done to force E.C., Hammond and Gary to cut back at the city level? And the State still insists that it is Lake Co's burden to support its poor and sick that we neither caused nor perpetuated? Oh, and as a resident of Schererville, I don't get to enjoy future sales tax revenue from a few chain restaurants, because a bunch of ya-hoos in the legislature can't figure out a way to get theirs too? "

lh wrote on May 1, 2007 6:29 AM:

" Why must our poorest families have to take it on the chin? Making them pay for their kids' schoolbooks just to balance the state budget is outrageous, but it's the plan of the republicans for you -- all heart! Here's my favorite line of the whole story: "The budget this year became inexorably linked to the property tax plan, which spends another $250 million in slots money in 2008 to ensure homeowners don't face more sticker shock in an election year." Yeah, you got it right -- it's all about reelection, not about doing what's right; forget about what's best for all. At the rate Lake County & Indiana are going, there will be very little difference between our region and the Illinois portion of Chicagoland. "

thinkfair wrote on May 1, 2007 6:03 AM:

" Amen, OC! "

oc wrote on Apr 30, 2007 11:24 PM:

" Someone asked "What would Indiana do if we stopped going to the boats, playing the lottery, and smoking?" More money would be spent at commercial enterprises that contribute to their communities, crime would drop, health care costs would come down, and we may not need as many taxes. I'm not thrilled by the income tax, but as an average wage earner, I am better able to pay it than those on fixed incomes would be able to pay a steep increase in property taxes. If the citizens of Lake County would elect better LOCAL leadership, the county government could operate more efficiently. Overall, I think the the legislature came to a reasonable compromise on the budget. I thank the governor(it was his initiative) and both parties for beginning to address health-care concerns and for larger increases in education (incl. all-day kindergarten) than in recent years. I thank Democrats for fully funding school texts for poor students and Republicans for restraining overall spending which will continue to help the entire state economy as a whole. "

MS wrote on Apr 30, 2007 9:03 PM:

" Very simply, services must be reduced so that taxes don't have to be raised in the first place. We can begin by ordering all people who appear to register for schools, health care, and other government services in Lake County to provide proof of citizenship. If they can't then they should be turned over to DNS and immediately deported, including children. If we don't have to pay for the millions of dollars in services the criminal aliens consume then there would be no reason to increase taxes and the level of services for Americans would actually improve. "

James M Guy wrote on Apr 30, 2007 5:32 PM:

" DINCS (Dump the incumbents) If you have had enough of high property taxes, high gasoline prices and wasteful spending then it's time to do sometghing. I think the prudent thing to do is vote out all the incumbents and start again with new elected officials every time there is an election. New elected officials certainly can do any worse than what we have now "

I have the answer!! wrote on Apr 30, 2007 4:26 PM:

" I say let all of Indiana's politicians take a 20% cut in pay to lower the taxes and to fund education!!!! "

" Again, register to vote. See how your representative voted on these issues. Then make sure you vote next election. "

thinkfair, part two wrote on Apr 30, 2007 1:59 PM:

" What I'm upset with is the fact that Schererville is probably going to lose out on a gold-mine in the lifestyle centers because someone wanted everyone in the state to have the same access to liquor licenses that they were going to grant Schererville. This was supposed to be a unique economic developmetn opportunity, and now it may pass us by because of our "wonderful, forward thinking" legislators. I do congratulate the legislators for pumping what will be millions into education. As an educator, we've had to get by on small increases, meaning less competitive salaries and benefits compared to Illinois, among other things. I hope that the schools that will receive less money are able to find ways to deal with the losses. "

thinkfair wrote on Apr 30, 2007 1:59 PM:

" I'm waiting to see what the actual bill states about the county income tax. The property tax hits people in an unfair way because it is NOT based on an ability to pay, like the income tax. Therefore, I support the income tax. HOWEVER, what the legislators need to do is mandate that any further increase in the income tax needs to be at least 60% dedicated to reducing property taxes, if not more. This way, as we pay more in the income taxes, our property taxes will go down. Plus, if the property taxes go down, fewer people will lose their homes because they are unable to pay. Who knows, some of these people may end up with a little more money that they can put back into the local economy. "

disgusted wrote on Apr 30, 2007 12:45 PM:

" why not open liquor stores on sundays and use all the taxes on sunday to fund property tax relied "

Vote OUT! wrote on Apr 30, 2007 11:17 AM:

" Come on people wake up and smell the coffee. Nothing is going to change in Northwest Indiana if we do not vote in new people. What has the Mayor really done besides have his picture taken a lot. And Mitch Daniels, what a joke, just his smile tells you what he is all about. You will not loose your City and State Jobs, how do they know who you are really voting for unless you tell them! Get the idiots out of office! They probably can't even handle there own household budgets! "

R. Salinas wrote on Apr 30, 2007 11:15 AM:

" These legislators brought the word " Stupid " to a new low. "

janski wrote on Apr 30, 2007 8:57 AM:

" I would rather see a hike in the sales tax in Lake County--Let the Illinois shoppers pay for it as they come here to beat the Il taxes. "

Twotall wrote on Apr 30, 2007 8:37 AM:

" All they are doing is moving the tax relief from property taxes to a income tax. People will be paying more taxes. People in Lake County are being taxed enough. The poor, elderly are going to be hit the most. "

Oldest Spears wrote on Apr 30, 2007 7:30 AM:

" Yeah, we pay the "spike" tax, which will cause a hardship for many, THEN get a rebate check in january..........I see a lot of brains here! Just cut the "spike" NOW, you MORONS! "

SF wrote on Apr 30, 2007 7:28 AM:

" Another tobacco tax, everyone needs to contact there elected officials, they lied just enough to get us off there backs--then in the last hour passed it. What will Indiana do if we stop playing the lottery, going to the boats and stop smoking? They would be in a world of hurt. People have to pay for services--not just a few paying for all the services. A flat tax for each individual for fire, police and emergency services--is a great start. "

What a joke! wrote on Apr 30, 2007 6:03 AM:

" Raise taxes to lower taxes? Only the goverment could come up with such an idea. That's like doubling the price of something to get half off. Time for new leadership, this bunch just dosen't get it. "

John Kenton wrote on Apr 30, 2007 3:27 AM:

" What a joke. These people arent getting it. MORE taxes?? Come on. STOP SPENDING. They are robbing Peter to pay Paul!!! "

Call/email Mitch wrote on Apr 30, 2007 12:45 AM:

" www.in.gov/gov/contact/index.html Veto the budget. Make em fix it right. No Rebate scams and no Income tax for Lake County. "

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