State should pay back Elkhart County

The state of Indiana is shortchanging Elkhart County tax revenues it dearly needs.
Posted on Feb. 24, 2013 at 12:00 a.m. | Updated on Feb. 24, 2013 at 5:33 p.m.

Our elected leaders say the state shortchanges Elkhart County by millions of dollars each year. State lawmakers disagree.

Which, as far as they’re concerned, ends the argument.

To the contrary. We’re just getting started.

Because while you’ve built a $2 billion state surplus, in part with income tax revenue never returned to Elkhart County, we’ve had to start turning county roads back to gravel.

It’s time to start returning our money — all of it — every year. And not just to Elkhart County, to every county.

Indiana employers withhold part of their workers’ pay to cover state and local income taxes, then send the money to the Indiana Department of Revenue. Counties get the money back each spring after workers file their tax returns.

But they only receive part of the money, because some workers — often undocumented immigrants — never file.

How much does the county lose? No one knows; the state does not track how much income tax revenue it receives from a county’s employers.

That’s right. The state cannot document how much tax money it receives from any employer in any county.

What happens next? As Elkhart County Auditor Pauline Graff explained it to a Truth reporter, the money that goes unclaimed “just kind of sits right in the pot over there and kind of makes its way to the state general fund.”

Elkhart County Council President John Letherman estimates that we lose millions to the state each year, pegging it in “the seven-figure range.” County Commissioner Mike Yoder looked at the numbers a few years ago and concluded that we’re losing between $2 million and $4 million a year.

With that kind of money, it’s easy to build a $2 billion surplus.

Meanwhile, three hours north of the gilded Statehouse, Elkhart County, Elkhart and Goshen struggle to make ends meet. Property tax caps forced Elkhart and Goshen to consider trash collection fees, and the county cannot adequately maintain its roads and bridges.

During last fall’s budget hearings, highway manager Jeff Taylor estimated that the county could afford to repave its roughly 1,000 miles of roads every 78 years — and that was after the county returned a stretch of C.R. 137 to gravel last August.

Rep. Wes Culver, a Goshen Republican, authored a bill this session requiring the state to record and track the amount of income tax received from all counties and return the total, after returns had been processed. Republican leaders killed it.

Rep. Tim Brown, chairman of the House Ways and Means Committee, told Culver that he shouldn’t expect a hearing on H.B. 1479. Brown, according to Culver, does not believe the state is shortchanging counties.

No, of course not. That would be impossible.

Except for that $320 million in tax revenues the state misplaced for four years under Gov. Mitch Daniels, former director of the Office of Management and Budget for President George W. Bush. And for that $206 million the Indiana Revenue Department mistakenly withheld from local governments, discovered just four months later.

The chairman of the House Ways and Means Committee doesn’t believe the state is shortchanging counties. Local elected leaders can show otherwise.

Hold a hearing on H.B. 1479, Mr. Brown. You’ll see for yourself how we send millions of dollars to Indianapolis each year that we never get back.

You may want that revenue to pad the state surplus, but we have more important needs. It’s not your money, it’s ours.

And we want it back.

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