Dan Carden
State lawmakers appear open to a number of options for fixing a gaming tax revenue distribution error made by the state comptroller starting in 2022 that benefited Gary at the expense of East Chicago and Michigan City.
Gary Mayor Eddie Melton told the House Ways and Means Committee Wednesday the Steel City can't really afford a $6 million hit to its $65 million budget for this year, nor can it easily repay some $12.2 million in subsequent years.
"It was very shocking to receive the information that we were going to receive such a devastating blow to our budget," Melton said. "We are losing revenue we cannot afford to lose to supplement other communities."
Melton declined to specify what city services or positions might be on the chopping block. Though he noted about 50% of Gary's budget goes to public safety.
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"How will we deliver quality services to these Hoosiers in Northwest Indiana?" Melton asked. "This will be catastrophic."
The error stems from a provision tucked in House Enrolled Act 1015 (2019) that provided a "hold harmless" to East Chicago and Michigan City if their share of wagering tax revenue declined in the four years following the relocation of Gary's casino from Lake Michigan to a more advantageous site adjacent to the Borman Expressway at Burr Street.
The state comptroller's office acknowledged it failed to calculate and distribute the hold harmless payments until last week, instead sending more money in 2022, 2023 and 2024 to Gary while shorting East Chicago by $6.5 million and Michigan City $5.7 million.
State Rep. Hal Slager, R-Schererville, has filed House Bill 1448, which spreads Gary's repayments over the next three years, as "a first stab of trying to deal with the law as we know it."
But Slager indicated he's prepared to work with Melton, and the other city leaders, to advance through the committee and the General Assembly a compromise all of them find acceptable.
Melton said he'd prefer the state just cover the debt using the unappropriated portion of an $18 million a year state tax break for the Gary casino that expires July 1.
Meet the 2025 Northwest Indiana legislative delegation State Rep. Carolyn Jackson, D-Hammond State Rep. Earl Harris Jr., D-East Chicago State Rep. Ragen Hatcher, D-Gary State Rep. Ed Soliday, R-Valparaiso State Rep. Pat Boy, D-Michigan City State Rep. Chuck Moseley, D-Portage State Rep. Mike Aylesworth, R-Hebron State Rep. Mike Andrade, D-Munster State Rep. Vernon Smith, D-Gary State Rep. Hal Slager, R-Schererville State Rep. Kendell Culp, R-Rensselaer State Rep. Julie Olthoff, R-Crown Point State Rep. Jim Pressel, R-Rolling Prairie State Sen. Dan Dernulc, R-Highland State Sen. Lonnie Randolph, D-East Chicago State Sen. Mark Spencer, D-Gary State Sen. Rodney Pol Jr., D-Chesterton State Sen. Ed Charbonneau, R-Valparaiso State Sen. Rick Niemeyer, R-Lowell State Sen. Mike Bohacek, R-Michiana Shores Love 0 Funny 0 Wow 0 Sad 0 Angry 0 * I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy. Dan Carden
Chief Political Reporter
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