By VICKI URBANIK

After earlier expecting an increase in county tax support for 2009, Porter Starke Services is now facing a cut of nearly a quarter of a million dollars due to an interpretation of the state law that governs funding for mental health centers.

The Porter County Council last week agreed that Porter Starke should return to a council meeting to address what would happen if tax support falls to $1.52 million next year, down from the $1.7 million that was earlier tentatively approved. This year, Porter Starke expects to get $1.59 million in county funding.

Porter County Council President Robert Poparad, D-1st, said the Indiana Department of Local Government Finance has set a restriction on county funding for Porter Starke at a level lower than last year’s and has informed the county that it has been overfunding the agency by about $700,000 for years.

“I’m advocating we give them what the law allows,” he said, as he suggested that the council approve a decreased Porter Starke budget.

Porter Starke President and Chief Executive Officer David Lomaka disagrees with the characterization that the county has overfunded the mental health agency. Rather, he said, the issue deals with an interpretation of a state law enacted a few years ago that exempted Porter County, along with Lake and St. Joseph counties, from a new cap on funding for mental health agencies.

In or around 2004, the state switched the funding formula for community mental health centers, holding them to their 2002 level or a 4-cent tax rate. The new legislation allowed mental health centers to grow in funding each year under a new growth quotient, as long as the total amount in funding didn’t exceed the cap.

However, the three northern Indiana counties were exempted from the 4-cent cap, because they were already above that rate. Years earlier, Porter County officials set the rate for Porter Starke at the maximum allowed, at a 10 cent rate. Lomaka said the question that now needs to be resolved is whether those three exempted counties qualify for the growth quotient, or whether the intent of the law is that the three counties should never be allowed to see their county funding grow.

“It was a very confused bill at the time,” Lomaka said, adding that he has read the law many times and still doesn’t think the intent is clear. “It looks like it’s really an interpretation thing.”

In the coming weeks, Lomaka said Porter Starke will try to clarify the state’s position, and has enlisted the help of State Rep. Ed Soliday, R-Valparaiso.

But Lomaka said whether the issues can get resolved before the county’s final budget adoption, set for Sept. 30, remains to be seen.

As long as the total is within state limits, property taxes that go to Porter Starke fall outside of the county’s frozen levy, meaning that the funding doesn’t compete with other county departments in the county’s main general fund.

Lomaka made it clear that Porter Starke is not seeking a higher county tax rate or that it takes issue with the Porter County Council. “This is not a Porter Starke-Porter County issue. This is a DLGF issue,” he said.

Porter Starke submitted a 2009 funding request for $1,658,140, about $65,000 more than it’s expected to get in 2008. The council not only tentatively agreed with that amount but it granted an additional $120,000 in order to fund an substance abuse prevention program that Porter Starke provides at the County Jail. Then last week, the county learned that the funding needs to be rolled back to $1.5 million or else it would fall within the county’s frozen levy.

Though Poparad suggested approving the lower budget amount, the council agreed to hear more from Porter Starke.

Council member Jim Burge, R-at large, said Porter Starke should at least get the chance to outline what a funding cut would mean for the agency.

Council member Mike Bucko, D-4th, questioned why the DLGF has been allowing county funding at a higher level than it should have been for years. He noted that the county gets audited every two years, questioning why no one from the state agency noticed the funding error.

“Where has their head been?” he asked.

Council Attorney Dave Hollenbeck said the real issue is not the amount of funding for Porter Starke, but the what extent the council wants to go outside its levy. He said the council has been opting to exceed its levy when it comes to Porter Starke.

Lomaka said Porter Starke doesn’t have the reserves on hand to absorb the funding loss, especially when the agency is growing, with a 7 percent increase in clients last year and a new Portage facility underway.

“I’d like to think it’s not a done deal,” he said of the reduced funding.