Lake County: A House Divided But Balanced (for now)

As Lake County begins to reap profits from a new property tax increase, officials in the cash-strapped government are already figuring out ways to spend the money. $24 million in tax revenue in Indiana’s second-most populous county may be a windfall in contrast to the staggering levels of debt held by that municipal entity, but fiscal restraint would prove useful in developing a sustainable and balanced budget moving farther away from the 2008 economic recession.

Lake County was already exempted through a special petition from the so-called “circuit breaker,” a 2010 statewide property tax cap, and Gary was specially exempted as well, with both entities claiming that they had such substantial debt and the state allowing older debt to be carried over and exempted from the ban. Past the point at which a government can no longer operate efficiently, debt becomes highly theoretical, so, even though Gary, for example, might be better off than bankrupt Detroit, the notion that an extra point or two of interest from Lake County’s already grossly-skewed property tax system will save the city budget is dubious. At the county level, tax rates are already levied so highly in Gary such that if the state mandated reassessment as it did in La Porte County, the county would lose a huge amount of revenue from the middle and lower-income industrial municipalities of the northernmost portions of Lake.

This division between the mixed-income, growing southern portions of the county and the largely lower-income northern portions of the county (contiguous with Chicago and considered part of Chicago’s urban area) pose some threats to longer-term stability as a drive around Schererville or Hobart might indicate– reckless suburban growth accompanied by the continuing struggles of the urban cores. Sprawl will probably only be made worse by the proposed Illiana Expressway (which is not expected to improve the suburban commute at all), so it’s safe to say that growth has to be carefully concentrated in areas that already have infrastructure, and budgets must reflect this. The sheer geographic divide ensures a difficult budget planning process. Surely the folks in Crown Point wouldn’t mind relocating their offices to one of those many vacant spaces in downtown Gary?

Nat Zorach

Nat M. Zorach, AICP is a city planner, community development professional, and MBA candidate at American University's Kogod School of Business, based in Detroit.

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