An Indiana House bill requiring the city of Gary to pay more than $12 million to East Chicago and Michigan City is one step closer to reaching Gov. Mike Braun’s desk.
The Indiana Senate appropriations committee unanimously passed and approved amendments to House Bill 1448.
The bill, authored by Rep. Hal Slager, R-Schererville, addresses a state comptroller’s mistake with supplemental payments that were added into state law during the 2019 session. Gary received funds that were supposed to be 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.
Sens. Travis Holdman, R-Markle, and Lonnie Randolph, D-East Chicago, sponsored the bill.
House Bill 1448 originally had Gary begin payments during fiscal year 2025, but the Senate appropriations committee approved an amendment that would start repayments one year later.
Gary Mayor Eddie Melton had previously said in a statement that it’s “totally unrealistic” for the city to begin payments this year. Melton spoke at the Senate committee meeting Thursday.
“I wanted to be clear that we support making sure that those communities are whole,” Melton said. “This is not an effort for us to withhold any dollars from them. We want to stay true to what the legislation says, however, it would be a fiscal constraint for us if we were to pay this year.”
Since Gary already has its 2025 budget completed, Melton said, making payments would take away from funds that have already been allocated, such as those for police, fire and other necessary resources.
Money for supplemental payments will come from deducted state comptroller funds and money appropriated by the Indiana General Assembly, according to bill documents. If the payments were to be withheld this year, Gary would lose about $6 million, Melton said Thursday.
Randolph asked Melton if he thinks the distribution is fair, especially when taking into consideration what East Chicago and Michigan City have lost over the last few years. Melton told Randolph that’s a difficult question to answer.
“Our gaming revenue is a significant portion of our budget,” Melton said. “Any fluctuation in that is going to impact how we deliver services to the citizens of Gary.”
Gary owes more than $6.4 million to East Chicago and more than $5.7 million to Michigan City, according to bill documents.
Michigan City Mayor Angie Nelson Deuitch testified during the Senate appropriations committee meeting. Deuitch wants the payments from Gary in a “timely manner,” she said Thursday.
Michigan City Mayor Angie Nelson-Deuitch, shown Jan. 11, 2024, said Thursday she doesn’t want supplemental payments from the city of Gary to drag on. Gary owes more than $5.7 million to Michigan City. (Michael Gard/Post-Tribune)
Last year, Deuitch said she had to convene five financial workshops with Michigan City’s council to talk about the city’s financial outlook. For several years before Deuitch’s first term, Michigan City had not met the projected wagering tax revenues in its proposed budgets.
Michigan City had a shortfall of about $2 million last year, Deuitch told the committee. In 2024, the city passed a budget that cut about $6 million from the year before.
“I understand if it has to be delayed a year, but I don’t want this to drag on for a decade,” she said. “We just want to see some assurances that we’re going to receive it within a certain time frame, whether that’s four or five years, versus seeing that drag on.”
Randolph asked Deuitch if receiving monthly payments would ease her concern in terms of regularity. Deuitch said it wouldn’t make a difference because the city budgets annually.
“What I don’t want to see is that this is a six, seven, eight-year payback,” she said. “The original was four years, and I would like it to stay at four years.”
The Senate is expected to vote on House Bill 1448 at a later date.
mwilkins@chicagotribune.com
