By VICKI URBANIK

Two local state legislators said there will definitely be a bill introduced in the upcoming session of the Indiana Legislature seeking a funding source for an extension of the South Shore commuter service into Valparaiso and Lowell.

But it remains to be seen if the legislation will involve a new tax in Porter and Lake counties, such as a $50 vehicle tax, a hike in the gas tax, or a local income tax.

Both State Senator Karen Tallian, D-Ogden Dunes, and State Rep. Ed Soliday, R-Valparaiso, were among those who testified at a hearing in Indianapolis Monday before the Commission on State Tax and Financing Policy.

The South Shore presentation was spearheaded by U.S. Rep. Pete Visclosky, D-Ind., who has long advocated the extension of the commuter service and who, as a member of the powerful U.S. House Appropriations Committee, would be instrumental in securing the federal match for the extension, totaling about $1 billion.

Both Soliday and Tallian said the challenge facing Northwest Indiana lawmakers will be to find a way to come up with $500 million in needed capital funds. The Northwest Indiana Regional Development Authority is expected to contribute $150 million, leaving Lake and Porter Counties to find another $350 million -- or about $25 million per year in order to pay off bonds for the capital costs.

The options being discussed include:

•A $50 “wheel” tax on vehicles, and $80 for trucks, which would be tacked onto vehicle registration fees. State Rep. Chet Dobis, D-Merrillville, proposed this in the 2007 legislative session but the effort failed.

•A 2-cent per gallon fuel tax, which would be added to the cost of gasoline in the two counties.

•A local option income tax. Both Tallian and Soliday said that a tax of 0.2 percent in each county would be enough to fund the local match. Porter County already has a tax of 0.5 percent, and under one option, Porter County’s tax would not be increased, but its use reallocated.

•A local sales tax or a combination of the various taxes.

Both Tallian and Soliday said it’s definite that a bill will be introduced in the next session, though exactly what it will say is still being debated.

“It’s a sure thing there’s going to be a proposal,” Tallian said. “We’re going to try to come up with a model that other states will want to use.”

“There are a number of options available,” Soliday said. To him, the key is “getting agreement from the legislators in these two counties.”

Neither Soliday nor Tallian appear to have made up their mind on what funding source they would support. Soliday said it would be very difficult to get a fuel tax passed in the General Assembly, but that “you can make a lot of arguments that it’s the most fair.” He noted that vehicles passing through Lake and Porter counties would also pay the tax if they refuel. Further, a higher fuel tax would be akin to a congestion tax, which some other communities are implementing: Those who choose to drive more, and thus pollute more, would in effect subsidize those who choose to take cleaner forms of mass transportation.

Tallian said she would prefer a combination of taxes, which would result in people paying for the South Shore extension in small increments, rather than in a one-time hit. She noted that many people are opposed to the wheel tax specifically because they would have to pay a large amount all at once.

To Soliday, in addition to reaching an agreement on the funding source, an unresolved issue of nearly equal importance is the manner in which a new tax would be administered.

Some have said that the Northwest Indiana Regional Development Authority should not have the ability to implement a tax or to bond, since RDA members are not elected officials. But Soliday also noted that some entities with bonding and tax authority -- such as the Valparaiso school board and municipal park boards -- also aren’t composed of elected officials.

“The RDA is a possibility in my mind,” he said, noting that the public would still be able to vote for or against the officials who appoint the RDA.

Some have also suggested that the Northern Indiana Commuter Transportation District should have the taxing authority. But even though the NICTD Board is composed of elected officials, Soliday noted that the board also includes officials from LaPorte and St. Joseph counties, raising issues of taxation without representation if they would be able to impose a tax on Porter and Lake county residents.

Both Soliday and Tallian said they have been hearing positive support for a South Shore extension. Soliday said once people learn that it would cost them the equivalent of about three pizzas a year to fund the South Shore, they tend to support it.

One of the options under consideration would be for Porter County to re-designate how it uses its income tax. Under state law, half of the county’s Economic Development Income Tax -- estimated to total $18 million this year -- funds the county’s annual $3.5 million contribution to the RDA as well as a local homestead credit that cuts homeowner taxes.

The other half is distributed to the county government and cities and towns based on population; despite the term “economic development” in its name, the law allows the tax to be used in practically any manner that the entities want.

Soliday said it’s possible that the CEDIT funds could be redesignated toward Porter County’s share of the South Shore capital costs.

Whether the state would force the county and municipalities to redirect their funds toward this purpose, or whether county and local officials would do so willingly, remains to be seen.

Also testifying at Monday’s hearing in Indianapolis were State Sen. Ed Charbonneau, R-Valparaiso, and Dobis.

Following that hearing, both Soliday and Tallian issued press releases touting the benefits of a South Shore extension.

Soliday’s statement focused on the new jobs and economic development that expanded mass transportation would bring.

He cited a plan that predicted a gain of more than 26,000 jobs due to the expansion, and a study that showed that current South Shore commuters save 68 percent over what they would pay to drive into Chicago for fuel, parking and tolls.

Tallian’s statement focused on the environmental benefits.

She said estimates show that the current South Shore service eliminates from air emissions 22.4 tons of volatile organic compounds, 368.8 tons of carbon monoxide, 25.2 tons of nitrogen oxide, and 7.4 tons of particulate matter.

She also said the expanded line will help Northwest Indiana better plan for growth, by concentrating new development around stations and revitalizing neighborhoods that already exist.

Posted 9/19/2007

Posted 9/19/2007