By the same vote margin that it took to join four years ago, Porter County has opted out of the Northwest Indiana Regional Development Authority.

Potentially unleashing legal and political warfare with RDA backers, the Porter County Council voted 4-3 Wednesday to withdraw its partnership with Lake County in the development agency that the two counties formed in 2005.

Facing a standing-room-only crowd of RDA backers and critics, the council also condemned a bill pending in the Indiana Legislature, H.B. 1607, which would create another regional agency, but one with the power to impose a new income tax in a four-county region.

Voting to withdraw from the RDA were council members Laura Blaney, D-at large; Sylvia Graham, D-at large; Rita Stevenson, D-2nd; and Dan Whitten, D-at large. Voting not to withdraw were Michael Bucko, D-4th; Karen Conover, R-3rd; and Robert Poparad, D-1st. Voting to condemn H.B. 1607 were all six Democrats, with Conover abstaining.

The vote to leave the RDA hardly means that the issue is settled.

The council directed Porter County Auditor Jim Kopp not to remit the next payment to the RDA, but didn’t rescind the 0.25 percent county income tax that provides the money, amid warnings from council attorney Scott McClure.

When asked if the council can legally leave the RDA, McClure said: “The answer is there is not a clear answer.”

McClure said the state law that allowed Porter County to join the RDA by imposing a new tax doesn’t specifically give the county the power to withdraw, nor does it specifically prevent it. But if the council were to rescind the income tax and if the council ends up legally barred from withdrawing, McClure said the county could be in the position of being forced to stay in the RDA without any way to pay its annual $3.5 million dues.

Council members agreed to revisit the funding again when the legal questions become clearer. Left intact, at least for now, was the county’s homestead credit. The state law that allowed Porter County to join the RDA by passing a new income tax requires that the first $3.5 million of the revenue raised go to the RDA, with the remainder toward the homestead credit. On the 2008 tax bills, the county credit cut the net tax for homeowners by 5.5 percent, or $178 for a Chesterton home assessed at $200,000.

The council’s vote to withdraw from the RDA came after 90 minutes of public comments and nearly one hour of council debate.

After the vote, newly hired RDA Executive Director Bill Hanna said the RDA Board will meet in the coming days to discuss its options. When asked if the RDA can survive as a Lake County-only entity, he said he believes it could, although some funding adjustments would be needed. However, he also expressed hope that the Porter County decision isn’t final. “I’m very hopeful Porter County will reverse itself,” he said.

Two of the RDA backers on the council urged their colleagues not to withdraw from the RDA just because they are angered by H.B. 1607, which was originally crafted to force Porter and Lake counties to remain part of the RDA for 10 years but which since has been amended to include a new regional transit district with the power to impose income taxes in Lake, Porter, LaPorte and St. Joseph counties.

Bucko said H.B. 1607 has been long in the planning process but was kept under wraps and is now fueling the push to leave the RDA. He said he’s appalled by the bill but that it has nothing to do with the RDA.

“That was the creature of Mr. Chet Dobis,” whom Bucko called “arrogant” for crafting legislation that would allow counties to vote in a new tax on other counties that may not want it.

Similarly, Conover said H.B. 1607 is not final and shouldn’t be the basis for an RDA withdrawal. Although the RDA needs to do a better job of publicizing its actions, she said the agency is nonetheless an effective regional tool to pool resources in ways local government can’t.

Conover further said that the council was heading into “treacherous waters” if it opts to leave the RDA, saying that the state might force the county to pay back what’s been spent on the RDA or other tax credits. “It was stated: There would be consequences,” she said.

The third council member who opted not to withdraw, Poparad, made no similar statements.

Four years ago, Whitten and Blaney were among the three who voted in the minority not to join the RDA. On Wednesday, they upheld their position that getting involved in the RDA was, and is, a bad move.

Whitten said that as bankruptcy lawyer, he knows that people are hurting and can’t afford more taxes, yet state lawmakers and other officials have wanted Porter County to raise more taxes for the RDA and other projects. “They want money for the stuff the RDA can’t fund,” he said.

He acknowledged that some of the RDA projects -- like the new Portage lakefront park -- are nice, but that people are much more worried about paying their bills. “The will of the people ought to be our moral compass,” he said.

Further, Whitten questioned the wisdom of partnering with Lake County. The city of Gary is three installments behind in its payments to the RDA, and Lake County as a whole remains the only county in the state without an income tax, while Porter County has two. He also said the communication with the RDA has been “deplorable.”

Blaney countered one of the comments made during the meeting that the vote to withdraw was partisan. To the contrary, she said she has received numerous calls -- from Republicans and Democrats -- urging the county to leave the RDA.

“I happen to believe that lower taxes and smaller government” is the best for economic development, she said, as she called for the tax money now spent on the RDA to remain in the hands of the taxpayers. She voiced support for transferring the tax entirely to the county homestead credit.

Stevenson was the only council member in office four years ago who switched positions Wednesday. She said the RDA was supposed to fund the Gary airport and South Shore extension. “That’s what I was sold on,” she said. Stevenson added that she has to represent the people, who have overwhelmingly urged her to withdraw from the RDA.

Graham said Porter County’s vote to withdraw from the RDA shouldn’t be viewed as a retaliation against what the RDA has accomplished, but against the prospect of more taxes and spending money on potentially ineffective projects. She noted, for instance, that there has been talk about privatizing the Gary airport, one of the RDA’s main projects.

“It seems like the state legislators do not listen to their constituents,” she said of the push for more county taxes.

The meeting room at Wednesday’s council meeting was packed solid. In total, 30 people urged the council to stay in the RDA while 13 urged a pull-out. Three others made somewhat neutral comments, though all three hinted support for the RDA.

The comments ran the gamut, touching on the goal of creating jobs during troubled economic times versus the wisdom of not spending tax money on more bureaucracy, the need for visionary leadership and the need to recognize failed promises, and the merits of regional cooperation versus the merits of Porter County bailing out a dysfunctional Lake County.

“You can’t keep spending money on a dead horse,” said John Rittel of Jackson Township, who addressed the business people in the audience by asking them if they would work for $15,000 a year as many people must do in the absence of lasting jobs.

“This is the only economic (mechanism) we have in Porter County,” said Mike Sommers, business manager for the Ironworkers Union, who urged the council to “be leaders” and go after H.B. 1607 instead if that’s the real target.

Porter Town Council member Micheal Genger said the town of Porter has had a favorable relationship with the RDA, and that the town can’t seek help from the county government, which can’t even get its tax bills out on time. Similarly, Valarie Kubacki said the RDA withdrawal is a “smokescreen” for the real problems facing the county, adding that the RDA is too new to give up on. “I don’t know of any successful business that’s given only three years” to succeed, she said.

But Art Yagodnik of Chesterton said so many people are financially hurting. Average people can’t afford to take their kids to Disneyworld, he said, adding that maybe they should be happy just to hop on a train to Lowell. “None of the RDA projects is necessary,” he said.

The last two public speakers gave widlly contrasting views about Porter County’s partnership with Lake County.

Speros Batistatos, president of the Lake County tourism bureau and a resident of Gary, said Porter County is getting a deal by being in the RDA, having spent about $10.5 million and getting about $13 million worth in projects. Gary also pays $3.5 million a year, he said, but hasn’t seen that kind of return. The two counties need to work together, he added, since everyone has a vested interest in the future of Gary.

“He’s right,” said the final speaker, Virgil Gassoway of Chesterton. “They need us.” But Gassoway said that’s all the more reason to pull out of the RDA -- as he said during the first RDA debate in 2005: “That giant sucking sound you hear is our tax money going to Gary.”

Posted 4/9/2009