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By VICKI URBANIK From building a youth sports complex to funding mental health, county officials and candidates have expressed a variety of opinions of how to spend the interest earned from last year’s sale of Porter hospital. On Tuesday, another proposal emerged -- this one from the Portage Township Schools, which would like some of the money to be distributed to schools and other taxing units. The plan, dubbed the “Porter County Plan,” was presented to the Porter County Council Tuesday by Portage School Board member Tom Pappas and Portage Superintendent Mike Berta. Their proposal assumes that $6 million will be available annually in interest on the $169 million in hospital proceeds. The plan calls for distributing part of the earnings -- up to the $2.14 million -- to each school system in Porter County based on enrollment. Under one option, each school would get $80 per student, resulting in Portage Schools getting the most, at $688,000, followed by Valparaiso, $512,000, then Duneland, $416,000. The proposal also calls for divvying up the interest money to the county government and municipalities for roads, sewers, drainage and police and fire protection, in addition to public health and safety programs, specifically, anti-drug programs, Porter-Starke Services, United Way agencies, the Family & Youth Services Bureau, Hilltop House, the Boys & Girls Clubs, and the YMCAs. The plan also calls for using the interest funds this year and next year to cover all the borrowing costs incurred by taxing units due to loans they take out as they await their tax draws. Pappas told the council that all school systems are facing shortfalls due to the upcoming “circuit breaker” property tax caps, and that schools will have to face some serious budget cuts that could jeopardize the quality of education. He also said the school officials were not appearing before the council for a hand-out. “We’re coming here out of necessity,” he said. Berta said in anticipation of the revenue shortfalls, the Portage Schools have already enacted cost-saving measures, such as as leaving vacant an administrator post at Portage High School. Pappas said that if the county were to use the hospital proceeds for schools and other public health programs, they would be leaving a legacy. County Council member Karen Conover, R-3rd, noted that others have put forth plans for use of the hospital proceeds. “We have not had consensus on anything at this point,” she said. The circuit breaker property tax caps, once they become fully effective in 2010, will limit the amount of property taxes paid by each taxpayer. For homes, the cap will be 1 percent of the home’s assessed value, meaning that a home assessed at $200,000 will not have a tax bill of more than $2,000. For businesses, the cap is 3 percent. If the taxes exceed those caps, the taxing units affected will lose out on the revenue. Preliminary estimates show that countywide, Porter County units could lose a total of $9.6 million from the tax caps in 2010. The loss to the Portage Schools is estimated at $1.7 million; for the Valparaiso schools, $1.6 million; for Duneland, $193,101. However, a number of factors will affect the final numbers, such as the assessed values and tax rates for each taxing entity in 2010. Also, the impact of the tax caps could be much different if state legislators make any changes to the various provisions in the state law, H.E.A. 1001, that established the statewide tax caps. Hospital Interest Plan Though the council took no action on the Portage Schools’ proposal, they did hear an update on the plans for investing the hospital proceeds. Council Attorney Dave Hollenbeck said because governmental units are restricted to just two-year investments, Porter County officials plan to work with local state legislators to change the state law so that the investments could be of a longer duration. If the county could invest the hospital proceeds for five years or so, it could get a better interest rate, added council member Mike Bucko, D-4th, a member of the hospital investment committee. The committee sought proposals from financial consultants to help advise the county on its investment strategy. Of the 20 proposals received, the committee narrowed down the list to 11, Hollenbeck said. The chosen consultant will help county officials select the financial institutions with whom to invest the money.
Posted 10/29/2008
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