Chesterton Tribune                                                                                   Adv.

Lake County income tax will be a loss for Porter County

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Porter County stands to lose nearly $1 million a year due to Lake County’s decision Tuesday to impose a county option income tax.

Lake County is the last of Indiana’s 92 counties without some form of a local option income tax. Under the state’s county income tax laws, people who work in a county with a county tax still pay at least a part of that tax if their home county lacks a tax of its own.

According to the Indiana Department of Revenue, 4,860 Lake County residents work in Porter County and, in tax year 2006, paid $959,885 toward Porter County’s income tax, CEDIT (County Economic Development Income Tax).

But now, if Lake County’s decision to impose a tax of its own stands, those residents will no longer pay Porter County’s tax but will pay toward their home county instead.

And that means Porter County will lose about 5 percent of its annual CEDIT revenue.

This calendar year, a total of $18.6 million in CEDIT was distributed in Porter County. Half of that -- or $9.3 million -- is divvied up among the county government, cities and towns. Most of that money has been spent on capital expenditures, infrastructure or other projects linked to economic development, although state law allows CEDIT funds to be used for any lawful purpose.

The other half of the CEDIT money goes for two purposes. One is Porter County’s $3.5 million contribution to the Northwest Indiana Regional Development Authority, which is made up of Lake and Porter counties. The remainder goes to fund Porter County’s own homestead credit, which is a tax cut for homeowners.

Unlike the other two types of county option income tax, the CEDIT tax requires non-residents who work in the county to pay at the same rate as resident taxpayers.

The Lake County Council passed the income tax by a 5-1 vote Tuesday. Because of the way county government is structured in Lake County, the commissioners there can veto the tax, but the council can override the veto.


Posted 12/19/2007




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