If the Porter County Council ends up rescinding the tax that has funded the county’s participation in the Northwest Indiana Regional Development Authority, would cities and towns step in -- if they could -- to keep the county’s membership in the RDA?

The answer from several officials attending a Monday press conference in support of the RDA appears to be “maybe.”

Cities and towns in Porter County have the authority to pass a county option income tax. Latest population figures show that the votes of the councils in Portage, Valparaiso, Chesterton and Porter would be enough to establish a COIT Council in Porter County. State law does allow pooling of local income tax funds for specific purposes; however, it’s questionable if such a pooling of funds for the RDA could be done under the current law.

After a press conference Monday at which town and city officials called on county to stay in the RDA, several officials were asked a hypothetical question about whether the cities and towns would be willing to explore reinstating the RDA income tax if the county council eventually rescinds it.

Valparaiso Mayor Jon Costas, who is also an attorney, noted that the RDA statute doesn’t give the municipalities that authority. He also agreed that there would be hurdles to overcome if the cities and towns teamed up to pass a COIT for the RDA.

However, he also said that in the wake of the county’s decision to leave the RDA, there have been some discussions about possibly changing legislation to transfer the authority to join the RDA to the municipalities. But he also said any change in the state law is totally a moving target; the current legislative session is set to adjourn Wednesday.

In his opening comments at Monday’s press conference, Costas noted that the five municipalities in attendance represent more than 50 percent of Porter County’s population and that most economic development projects occur in cities and towns.

If municipalities would either have, or be granted, the authority to keep the county’s involvement in the RDA, Costas said he believes Valparaiso would vote in support if it meant no change in the current tax structure, with the first $3.5 million going toward the RDA and the rest toward property tax relief in the form of a county homestead credit.

“I certainly would vote for that,” he said.

Costas stressed the importance of the county homestead credit in cutting taxes for homeowners, particularly seniors and others who pay relatively little toward the county income tax.

“The property tax relief aspect of this is not insignificant,” he said.

When asked the same question about the possibility of municipalities imposing a tax on their own to keep the county in the RDA, if the county rescinds the current tax, Porter Town Council President Michelle Bollinger said she believes the town of Porter would support such a move if it meant no change in the existing tax structure. She said the town would have to demonstrate to the public the value of the RDA, but said that the RDA/homestead credit tax is one tax that the public can see meaningful results.

Often, she said, peole don’t know where their tax money is going. “So many taxes we pay -- poof -- they’re gone,” he said.

Portage Mayor Olga Velazquez said she would oppose any new or additional taxes, but if the county were to rescind the current RDA tax and municipalities would have the power to reinstate it in order to keep the RDA, she said she believes that would be worth considering.

The county council voted 4-3 on April 8 to withdraw from the RDA but did not rescind the 0.25 percent tax that was imposed in 2005 when the council first joined the RDA with Lake County.

Council members opted not to take action on the tax, at least not at the current time, due to the unresolved legal questions. Council attorney Scott McClure warned that if council rescinds the tax and later learns that it cannot legally pull out of the RDA, the county might have to pay the $3.5 million RDA dues with no funding mechanism. Council members said they would discuss the fate of the RDA/homestead credit tax at a later date once the legal issues become clearer.

Posted 4/28/2009