Porter County Council members are moving forward with a proposal to reimburse cities and towns for their borrowing expenses caused by this year’s late property tax bills, though it’s uncertain if such a plan would be allowed by the state.

The council on Monday set a special “roundtable” meeting with the municipalities for 6 p.m. on Oct. 8 to discuss their borrowing expenses and the options that may or may not exist for the county to reimburse those costs.

Earlier this month, Porter County Council President Robert Poparad, D-1st, proposed the idea of tapping the county’s interest from the hospital sale proceeds, after first proposing the idea when tax bills were late last year. The Indiana Department of Local Government Finance responded by saying that there is no provision in state law that would allow the county to reimburse local units for their borrowing costs.

The idea resurfaced Monday when Porter County Council member Karen Conover, R-3rd, said that cities and towns in Porter County have had to pay an extra $388,754 in interest costs this year due to the county’s late tax bills.

“I feel we have an obligation,” Conover said.

Council member Dan Whitten, D-at large, noted that the county council doesn’t have direct control over the tax bills and that it’s done everything it’s been asked to do to help the process. Still, he agreed that there’s been a failure on the part of county government in getting out the bills.

Conover pointed out that in the absence of tax revenues, some taxing units have approved internal loans rather than borrow from a bank; that has been the case with the town of Porter. She said a formula of some sort could be worked out to reimburse taxing units in those instances.

The council agreed to hold a roundtable meeting with cities and towns to get more information about their borrowing expenses and the available options.

Both Poparad and former county council attorney Dave Hollenbeck agreed that if the county outright reimburses taxing units, the funding could be considered miscellaneous revenue and could impact how much of a levy increase the units would be allowed to raise next year.

At this point, the council agreed to meet only with the cities and towns, and not other taxing units, such as schools or libraries, that have also had to borrow this year.

The council’s meeting Monday constituted its annual review of the proposed tax levies for local tax units. Under a state law that took effect last year, county councils must now review the levies for the following budget year and make a non-binding recommendation to the state over whether the taxing units are within state levy restrictions.

Taxing units will be allowed to increase their property tax levies next year by 3.84 percent.

One budget noticeably absent was that for the town of Chesterton. Council members said they had not received a budget from the town; this morning, however, the town’s clerk-treasurer office said two copies were personally hand delivered to the auditor’s office.

Council attorney Scott McClure said if taxing units do not submit their budget plans for the county’s non-binding review, they would end up at their current year’s levy. Poparad said the council will revisit the Chesterton budget and any others that they don’t have.

The council unanimously passed a motion making a non-binding recommendation in support of the tax levies that fell under the state’s growth factor; for those in excess, the council’s motion recommended that the units make the required cuts.

Among the budgets reviewed were several in the Duneland area: Dune Acres’ tax levy of $451,000 is $17,160 under the growth factor; Burns Harbor’s levy of $2,455,692 is $3,586 under the limit; Westchester Public Library’s levy of just over $3 million is under the limit by 26 cents; and the Indian Boundary Conservancy District’s levy of $111,000 is under the limit by $1,467. The town of Porter’s levy of $4,236,779 is $14,775 in excess of the limit, and the Damon Run Conservancy District’s levy of $991,000 is also over the growth factor by $63,074.

The council’s budget reviews continue today at 5 p.m. The Indiana Department of Local Government Finance will give final approval to all proposed budgets.

Posted 9/29/2009