A newly-enacted 1.5% local income tax hits taxpayers in Lake County starting today. According to the Northwest Indiana Times, local governmental units have prepared 2014 budgets anticipating a windfall of more than $45 million from the newly-enacted tax. Part of the tax increase, 1%, is earmarked to provide property tax relief; however, homeowners in East Chicago, Gary, Hammond and Lake Station will see very little property tax relief because most of them are already paying the maximum allowed under the state's property tax cap law.
The other 0.5% is split between public safety and economic development purposes. The portion allotted for public safety is to be used for police, firefighters, emergency medical services, 911 services, the county jail and juvenile detention services. The portion set aside for economic development purposes can be used for "any lawful purpose," which in Indiana includes public handouts to businesses which make campaign contributions to the elected officials who make tax and spending decisions. Any source
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