Luecke to offer compromise on local income tax

By ED RONCO, Tribune Staff Writer

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By WSBT News1

Story Created: Dec 11, 2008 at 12:38 PM EST

Story Updated: Dec 11, 2008 at 12:56 PM EST

SOUTH BEND — Mayor Stephen Luecke said that he’ll offer a compromise on a contentious tax measure to be discussed at Thursday night's Common Council meeting.

Luecke had proposed a 1 percent local option income tax, or LOIT, to make up for the revenue lost by cuts in property taxes.

On Thursday, he said he would instead propose a 0.5 percent LOIT.

Luecke, who along with other leaders has faced public pressure against the proposed tax increase, said the nation’s ailing economy was a major reason behind cutting the proposed tax in half.

He also said he put forth the 1 percent tax to “show the public what the true cost of the tax caps is,” and what the city needs to do make up the shortfall.

Last year, the Indiana General Assembly passed major cuts in property taxes. The move, while popular with some property owners, has raised the ire of local government leaders who say the loss of money to city and county coffers could hamper the services those governments offer.

Luecke said even with a local tax, local government will still have to do some streamlining.

“Having a shortfall still facing us will make those decisions more urgent and provide an impetus for serious discussion with the Council and the public about what services should be provided by local government,” he said.

Enacting the full amount, in addition to putting a larger strain on families, will let the state legislature “off the hook,” and make it feel “it doesn’t need to provide any other tools since we will have ‘solved’ our problem,” Luecke said.

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