Not unexpectedly, the Porter County Council has filed suit, seeking a ruling in support of its 4-3 decision to withdraw from the Northwest Indiana Regional Development Authority and to block the county auditor and treasurer from making any additional payments to the RDA.

The lawsuit also challenges a provision in the state’s new budget law that passed in June that would allow the county’s income tax funds to continue to be used toward the $3.5 million annual membership in the RDA if two municipalities vote to join the RDA.

The suit contends that language is unconstitutional, since county tax funds would be used to benefit two municipalities while other taxpayers who pay the income tax would not have representation as to how their tax dollars are spent.

The council voted 4-3 in early April to withdraw from the RDA and directed County Auditor Jim Kopp not to make payments toward the RDA dues. Almost immediately, the legal wrangling began. The RDA Board asked the Indiana Attorney General’s office to issue an opinion on whether the county could legally withdraw from the RDA, and Kopp and County Treasurer Jim Murphy announced that they would make the RDA payments in defiance of the council’s vote. The four council members who voted in support of the pull-out later retained the Indianapolis law firm of Hall Render for legal guidance.

One of the council members in support of the RDA withdrawal, Dan Whitten, D-at large, has said that because of the legal questions, the council might end up filing its own lawsuit to resolve the issue.

In the meantime, Indiana lawmakers passed a state budget bill that contained language allowing two municipalities to join the RDA if the county withdraws -- and to continue to use the County Economic Development Income Tax funds for the membership.

The lawsuit filed in Porter Superior Court on Friday contends that the language in the state budget bill clearly allows the county’s withdrawal from the RDA, but contends that the language allowing the municipalities to join and use the CEDIT funds are unconstitutional because it amounts to a special law and to an improper regulation of county business.

The language in the budget bill would allow two or more municipalities of Porter County to direct the spending of CEDIT funds, which is a matter that should be left up to the county council, the lawsuit says. The suit also says that taxpayers in the unincorporated areas and in municipalities that are not part of the RDA must still pay the income tax but would not be represented if the CEDIT is used for the municipalities that are members of the RDA.

The lawsuit names the RDA, Kopp and Murphy as defendants.

Posted 8/31/2009