CROWN POINT, Ind. – A northwestern Indiana county that is struggling to stay afloat without raising taxes may be turning to a neighbor for help.
Lake County Commissioner Gerry Scheub says he has talked with Porter County Treasurer Mike Bucko about borrowing up to $15.5 million to keep his county's spending at current levels.
Bucko tells The Times in Munster he contacted Lake officials after reading newspaper stories about the county's financial predicament.
Lake officials are facing declining tax revenues and higher operational costs and were able to pass a balanced 2013 budget only by severely cutting spending in areas such as bridge repair and flood control and borrowing to make up the difference.
Bucko said Porter County has been looking for ways to invest the $173 million it received from the sale of the Porter Memorial Hospital to a private health care firm several years ago. Changes in state law and a local ordinance allow the county to loan money to other local governments for up to five years.
The county also has $10 million from its share of the state's lease of the Indiana Toll Road.
Porter County can loan out up to 25 percent of its overall portfolio, or a little more than $60 million, he said.
"We have an opportunity here. If it benefits us, we'll do it, and if doesn't work for us, we won't," Bucko said.
Bucko said Porter County already has loaned a combined $35 million to the Crown Point, Lake Central and Hammond school districts. He said he's also just completed a five-year, $12.8 million loan to the city of Hammond, which will generate average net earnings of 3.85 percent per year.
That's well above the typical investment options available to him as treasurer, which are providing returns of less than 1 percent, he said.
"Better than three times the earnings can be made by buying municipal debt," Bucko said.
He said he might be able to offer Lake County a favorable interest rate and still get a better return on his investment than the private bond market can offer.
"If it works out well for us as an investment and for them as a borrowing mechanism, then it's good for everybody," he said.