The Porter County Council office received data from the Indiana Department
of Revenue Tuesday indicating that the impact of the new Lake County local
income tax will short Porter County taxing units roughly $1 million per year
in county economic development income tax (CEDIT), starting sometime after
That figure differs from an earlier estimate that came out of the County
Auditor’s office late last week, saying that the pinch felt would be close
to $1.66 million, based on employment statistics from the U.S. Department of
A deputy director with the Indiana DOR pulled their data from the tax
records they have for Lake County residents working in Porter County.
According to the data, in the 2012 tax year, 5,907 workers from Lake County
generated $1,145,417 in CEDIT revenue.
In 2011, 5,611 workers produced $1,026,841 in CEDIT comparable to 2010 when
5,477 workers paid $953,399 in CEDIT.
The way Porter County’s CEDIT is set up, half of its’ distribution is shared
among county government and the municipalities for projects while the other
half pays the county’s share of $3.5 million due each year to the Northwest
Indiana Regional Development Authority. Any remainder goes to property tax
Now that Lake County will have its own income tax, Lake County residents who
work in Porter County will no longer pay income tax to Porter County, which
has had CEDIT in place for a number of years. Those workers will now have
1.5 percent of their paychecks go to Lake County government units starting
on October 1.
Porter County government will see the largest difference since it receives
the largest CEDIT share of 42 percent, followed by Portage which receives 22
percent, Valparaiso at 19 percent, Chesterton at 8 percent, Porter with 3
percent, and Burns Harbor at about .7 percent.
The County Council’s financial specialist Vicki Urbanik said when you take
half of the $1,145,417 in CEDIT for 2012 and multiply it by the 42 percent
share that Porter County Government receives, the loss there would have been
For Portage, the loss would have been $125,996 in 2012 CEDIT, $108,815 for
Valparaiso, $45,817 for Chesterton, $17,181 for Porter, and $4,009 for Burns
Urbanik said that the figures are preliminary as she is still waiting to
hear back from the DOR on a few more points of inquiry. Once the amounts are
accurately tabulated, she will provide reports to the Council as well as to
Chetrice Mosley, a spokeswoman from the Indiana DOR, was able to confirm
Tuesday the figures Urbanik received were the corrected estimated figures.
Urbanik said that CEDIT revenues have risen steadily since 2011 when the
County began to rebound from the most recent economic recession. The growth
from 2012 to 2013 was 3.6 percent, she said, and the county can expect those
amounts to continue increasing.
“I don’t think it is going to be as bad as we fear,” said Urbanik. “I
believe the natural growth in CEDIT will offset the loss from Lake County.”
For this year, the state certified Porter County’s total CEDIT amount at
$21.7 million, compared to $17.3 million in 2011, according to the Indiana
Department of Local Government Finance.
The County will still be able to fully fund its $3.5 million RDA dues so
cities and towns should not worry about having “to scramble around,” Urbanik
said. The county is required by law to pay that amount. That means the
County can anticipate a bigger hit to its CEDIT property tax relief, Urbanik
The way income taxes are distributed, the earliest the County will see
effects won’t be until either 2015 or 2016.
County Council President Bob Poparad, D-At Large, told the Tribune he
doesn’t see the loss as substantial enough for panic. The effects won’t be
felt this year so it will not be a factor in the upcoming round of County
budget hearings, he said.
“We’ll plan for it, but it’s not like we’re going to be shutting the (County
Administration) building down,” said Poparad.
Mosley said that the DOR encourages employees from Lake County to make sure
their WH-4s are correct with their employers before the tax takes effect in
October so that the proper taxes are collected respective to the county they