By VICKI URBANIK

A new convention center is the type of project that the Northwest Indiana Regional Development Authority could pursue if it had the money that could be generated through a new income tax and a food-and-beverage tax in Lake and Porter counties.

The RDA last week unveiled a report that outlined how the RDA could fund its four priority projects, namely, the Gary/Chicago Airport expansion, the South Shore commuter line extension to Valparaiso and to Lowell, the regional bus service and the Marquette Plan shoreline project.

The report found that if the RDA stayed at its current funding levels, with no other new revenue coming in, it would be able to put up the local match for federal dollars for all of its priority projects -- except for the South Shore commuter rail extension beyond Munster.

However, if Lake and Porter counties were to adopt a new income tax of 0.15 percent, then the RDA would be able to fully fund the South Shore extension, according to the report, prepared by Policy Analytics LLC.

But even with that new income tax, the RDA wouldn’t have the funding available for other economic development projects. As the report describes it, a convention center or other projects would be “opportunities missed” without the additional tax.

The Lake County tourism bureau has recently been advocating a major new convention center. Casino owner Don Bardin has also pitched the idea of a new hotel and convention center to the RDA.

RDA Executive Director Tim Sanders noted that state law allows the RDA to pursue other economic development projects of a regional nature, in addition to its four targeted projects. He said there is no proposal now before the RDA for a convention center, but said that such a project is “in the wind” and could be the type of economic project the RDA would be allowed to pursue.

The RDA’s funding report doesn’t actually recommend the new taxes, but represents more of a “road map” showing how the RDA can accomplish its projects, Sanders said.. The report, which must be approved by the state’s Office of Management and Budget, should help foster regional discussion of options for the RDA, he said.

“This is a scenario to get these things done,” he said. “If there’s another idea out there, it’s not on the books.”

The report focused on the income and food and beverage taxes specifically because those are two taxes that the law already allows Lake and Porter counties to impose, Sanders said, adding that Policy Analytics didn’t want to speculate on funding possibilities that currently don’t exist.

He also emphasized that it would be up to elected officials -- whether at the county or state level -- to impose any new taxes. The RDA doesn’t have such authority.

A 1 percent food and beverage tax in both counties would raise about $10.8 million a year, according to the RDA report. The tax would apply to restaurants and carry-outs, but not to food bought in grocery stores.

The separate proposal for a new income tax for the South Shore presents some logistical hurdles. Under current Indiana law, income tax revenues from either the County Option Income Tax or the County Economic Development Income Tax are distributed to various taxing units to spend as they see fit.

So, in the absence of legislation mandating how the money is to be spent, the municipalities and the county government in both Lake and Porter counties would have to agree to “pool” their funds together for the South Shore. No one entity in either county would get enough income tax money on its own for the South Shore.

Lake County is one of just a few Indiana counties that so far have no local income tax. Porter County’s CEDIT tax stands at 0.5 percent.

But there’s a hitch to the income tax proposal for Porter County: The county is currently at its maximum CEDIT rate. So for Porter County to use an income tax for the South Shore, it would either need to enact another income tax, likely COIT, or dip into its current CEDIT funds, with the county and several municipalities agreeing to chip in toward the project.

The RDA’s report suggests that a 0.15 percent income tax in the two counties would raise about $20 million a year. That would allow the RDA to issue a 30-year bond for the South Shore project, paying off the bonds with the income tax funds.

The total cost of the South Shore extension to Lowell and to Valparaiso is nearly $1 billion, but federal funds are expected to cover about half the cost. That leaves the RDA with the challenge of coming up with a local match of $525.4 million, according to the report.

The longstanding South Shore proposal, officially known as the West Lake line, calls for the South Shore commuter service to extend to Munster, and then branch off into two directions. One branch would take the trains through Highland, Griffith, Merrillville, Hobart and then Valparaiso. The other branch would extend south into Lake County, through Dyer, St. John, Cedar Lake and then Lowell.

Posted 3/1/2007