Gary officials speak on House Bill 1448 at Indiana statehouse

Gary Mayor Eddie Melton was one of three city officials who testified against an Indiana House bill that would require the city to pay approximately $12.3 million to East Chicago and Michigan City.

Indiana House Bill 1448, authored by Rep. Hal Slager, R-Schererville, addresses issues with supplemental payments that were added into state law during the 2019 session.

A mistake by the Indiana State Comptroller sent funds to Gary that should’ve been distributed to East Chicago and Michigan City to ease the financial burden following the move of the Majestic Star casinos to Hard Rock Casino Northern Indiana, located along Interstate 80/94.

Melton, City Controller Celita Green, and Common Council Vice President Lori Latham, D-1st, spoke at a Wednesday Indiana House Ways and Means Committee about how the bill would impact Gary’s finances.

“Imagine, if you will, either in your home budget or at your business, you work with your team or with your family to prepare for the next year, and you find out a significant chunk is going to be withheld,” Melton said. “For us, as a city, that’s going to have a serious impact.”

Slager said Wednesday that the funds will be distributed throughout three years to not impact the city all at once. He called it an oversight on everyone’s part.

“The city of Gary didn’t catch it,” Slager added. “The other communities that were to receive the money — the cities of East Chicago and Michigan City — neither of them raised their hands and said, ‘Hey, weren’t we supposed to get something?’”

State Comptroller Elise Niseshalla also testified during the committee meeting, calling the issue a difficult situation.

Jennifer Thuma, general counsel for the comptroller’s office, said Gary won’t receive any additional distributions in 2025. Hammond was part of the original 2019 bill but wasn’t included in House Bill 1448 because the city didn’t see a decrease in the wagering tax revenue, Thuma said.

Hammond Mayor Tom McDermott previously told the Post-Tribune that since Hard Rock Casino opened, Horseshoe in Hammond has lost about $15-20 million each year. The city’s yearly revenue is about $130 million, he added.

Throughout his time as mayor, Melton said he’s focused on stabilizing Gary’s population and finances. He told committee members that “progress is happening” throughout the city.

Melton is concerned about how the city will continue to grow and provide services if they owe money to other communities. In a previous statement to the Post-Tribune, Melton said it’s unrealistic to have Gary pay anything in 2025.

Melton asked committee members to keep an open mind when addressing the issue.

For the fiscal year beginning July 1, 2025, approximately $1.4 million should be paid to Michigan City for the funds not paid in fiscal year 2021, according to the bill.

Starting in fiscal year 2026, approximately $2.9 million should be paid to East Chicago and approximately $2.2 million should be paid to Michigan City for funds not paid in fiscal year 2022, according to the bill.

For fiscal year 2027, approximately $3.6 million should be paid to East Chicago and approximately $2.2 million to Michigan City for funds not paid in fiscal year 2023, according to the bill.

“I realize that the plan forward is going to be critical, but I have to focus on the right now,” Melton said, “because even if we were to create a plan to move forward, that will help stretch out those payments. However, this year, and you heard it clearly in testimony, money will be withheld from the city as we speak.”

Latham told committee members that she and Parliamentarian Linda Barnes Caldwell, D-5th, have waited to speak against the bill. Barnes Caldwell also attended the meeting but didn’t testify.

The 2019 legislation gave Gary the ability to lead its own economic revitalization, Latham told committee members.

“It was never really about gaming,” she said. “Instead, it was an opportunity to optimize our casino license, one of the many economic development tools created by this body through legislation, and allowed us to use every asset at our disposal to catalyze our city’s economic development, progress and upward mobility.”

Latham assured committee members that the city never wants to harm other local communities and said House Bill 1448 will “do just that” because it will set Gary back.

The bill will unravel the city’s measurable progress, Latham said. She asked if the bill was about potential harm and if there had been a correct dollar amount assigned to the potential harm.

“I see that it’s been statutorily established, but has it really been measured?” Latham asked. “Are we sure that this isn’t just speculative? And is that ‘potential’ even worth doing something that we know would be counterproductive, and quite frankly, confusing to the progress of another economic driver in the state?”

Rep. Gregory Porter, D-Indianapolis, thanked the Gary officials for testifying and told committee members that the state needs to be held accountable.

“I hope we can, as a body, continue to have that meaningful conversation on how to make this situation a lot better for a city that was, at one time, an economic engine for the state of Indiana,” Porter said. “Now they’re becoming an economic engine for Northwest Indiana again.”

mwilkins@chicagotribune.com

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