It’s almost as if Christmas came eight months early this year for taxing units in Porter County.

The Porter County Auditor’s Office will shell out more than $1.8 million in County Economic Development Income Tax (CEDIT) dollars next week that was part of the $205 million in revenues undistributed by the state since 2011. By the end of this year, the county will have more than $6 million of the mishandled money.

County Auditor Robert Wichlinski invited heads of the county’s 29 taxing units to attend three open sessions at the county administration building this week to talk taxes and the impact the state’s 1-2-3 tax caps are having on revenue for each of the units.

Thursday’s session was particularly interesting for the county’s 11 municipalities as Wichlinski also provided calculations of the increases they will receive this year in their CEDIT revenue. The calculations are based on population figures provided by the Center of Workforce Development, Wichlinski said, and funds that were to be distributed by the Indiana Department of Revenue through April 2012 will go out either Monday or Tuesday in this month’s installment of CEDIT payments.

The Indiana Office of Management and Budget disclosed the gaffe a week ago Thursday, reporting it was made due to a computer programming error.

All together the county will receive an additional $3,045,644.77, which includes all of 2011 and 2012 additional funds and interest. From that amount, Porter County Government will take in $1,270,447.44. The municipalities from greatest amount of funds received to lowest amount are Portage ($687,537.65), Valparaiso ($580,353.81); Chesterton ($232,236.79); the Town of Porter ($95,338.50); Hebron ($71,275.61); Kouts ($34,986.07); Ogden Dunes ($23,268.29); Burn Harbors ($19,186.64); Pines ($14,510.92); Beverly Shores ($12,706.38); and Dune Acres ($3,796.67).

CEDIT funds can be used for a number of purposes but its main function is to maintain and build infrastructure to support economic development.

Wichlinski said for each CEDIT dollar that comes in, 50 percent goes to governing entities, $3.5 million is paid to the Northwest Indiana Regional Development Authority and the remaining balance is used in the form of homestead credit.

The additional CEDIT money will now be included in monthly payments throughout the rest of 2012. In Duneland, the Town of Chesterton will see an additional $12,019 per month, Porter will see $4,468.09, Beverly Shores $563.77 per month and Dune Acres $167.43. Porter County will get a boost of $62, 990 each month.

County Commissioner President John Evans, R-North, said he thinks the county’s cut of the money should be placed in a CEDIT fund for E-911 rainy day money.

The county’s current rainy day fund can only be sustained until the middle of 2013 and if no solution is made, a shortfall of more than $2.5 million per year will plague the E-911 budget.

State lawmakers passed a law this year that would impose a new monthly surcharge of 90 cents on all phones but Evans said it could be some time yet before the state gives the county any relief.

“We need to make sure that we have money shored up for 911,” said Evans.

If the bonus money ends up not being needed for the 911 system, Evans said the money could always be used for other CEDIT projects.

County commissioners create CEDIT funds for specific purposes while the county council is the body which appropriates the money.

For taxpayers with homestead credit, the auditor’s office determined the state will kick back $3,042,163 of new homestead credits from 2011 ($1,228,335.50) and 2012 ($1,813,828.77). However, it will be 2013 before taxpayers see any relief since the 2011 pay 2012 tax bills just went out last week.

Wichlinski has reminded taxpayers they have until the end of this year to verify their eligibility for homestead credit with his office. If they fail to do so, taxpayers could see their exemptions left off their taxes in the future. To prevent this, taxpayers are advised to fill out the Pink Homestead Credit Information Form included in this month’s tax bill and direct it back to the auditor’s office.

Meanwhile, Wichlinski updated local taxing unit heads on the ramifications of the “1-2-3” tax cap amendments to the Indiana constitution.

The “1-2-3” title refers to legislation passed that limits the tax on gross assessed value. Primary residences are capped at one percent, residential property not attached to primary residences such as sheds and apartments are capped at two percent, agricultural land is capped at two percent, and commercial and industrial properties are capped at three percent.

Wichlinski and financial consultant Jim Bennett said the state has passed new legislation this year (House Bill 1072) that revenue given will first need to pay off a taxing unit’s debts before it can be used for anything else.

Wichlinski believes that eventually all taxing units in the county will be held to the circuit breakers, the policy approved by 72 percent of Indiana voters in the 2010 elections.

“With the 1-2-3 tax caps, revenue is becoming a challenge,” said Wichlinski. “It’s not a perfect system. There are a lot of moving parts. But we’re all in this together.”

If one unit in the county is being affected by the tax caps, it indirectly affects the other units which make up the county’s total gross assessed value.

The best way to handle the situation, Wichlinski said, is for taxing units to keep the lines of communication open with his office so they can make accurate projections of the incoming taxes and what options are available to them.

“The sooner you know what the impact to your revenue is, the better,” he said.

The auditor’s office also provided a summary report on the revenues generated by the county’s twelve Tax Incremental Finance districts.

Part of the report includes revenue collected by the TIF districts that was not distributed to taxing units that would normally go to public use.

TIFs throughout the county in cities and towns collected a total of $16,233,540 in net revenue for 2011-12. TIF #7 located in Duneland took in the following net revenue amounts from its three subsections: Chesterton-Liberty ($1,946,179), Chesterton ($658,641), and Chesterton-Jackson ($0). TIF #8 in Burns Harbor reportedly captured $578,727.

Wichlinski said new commercial and industrial properties will have an increasing role in TIF districts and thus tax revenue for the county.

Posted 4/14/2012