Lake County officials said they plan to sue the state next month over a law requiring the county to adopt a 1% local option income tax in order to lift a freeze on its property tax revenue.
Lake County, Indiana’s second-largest county, is the only one of the state’s 92 counties that has not adopted a local income tax. Indiana allows counties to adopt local income taxes to help offset dependence on property tax revenue.
The state froze Lake County’s property tax levy in 2007, saying that it was too reliant on property tax revenue. Lake County has among the highest property tax rates in the state.
County officials said last week they expect to file the lawsuit in December, according to local reports.
“It’s our option to adopt it, and it’s kind of unfair for them to freeze our levy because we didn’t adopt a tax that was optional,” county commissioner Roosevelt Allen was quoted as saying in the Gary Post Tribune. “We are getting to the point now where we will probably at some point have problems delivering vital services that we’re required to deliver to citizens of Lake County. It’s starting to affect public safety and courts, so it’s really problematic.”
The lawsuit is not related to the state’s property tax caps.