House committee passes Gary repayment bill for East Chicago, Michigan City
After postponing the vote, the Indiana House of Representatives Ways and Means Committee has passed a bill that would require Gary to pay approximately $12.3 million to East Chicago and Michigan City.
Indiana House Bill 1448 passed the committee in a 15-8 vote Thursday afternoon.
The bill, 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, according to Post-Tribune archives.
Rep. Earl Harris, D-East Chicago, explained his vote before voting against the bill.
'We're in a situation here where the party that is responsible for the mistake is not really playing a role in resolving it,' Harris said. 'Three cities that are not responsible are being negatively impacted.
House Bill 1448 has Gary repay the cities in three years. Harris proposed an amendment on Wednesday to give Gary 10 years to pay the funds.
On Thursday, Harris changed his amendment, proposing the creation of a loan from the state that Gary could pay back over eight years. The loan would allow East Chicago and Michigan City to receive their missing funds up front, and Gary would not have to pay interest on the loan.
'This is a solution that is a win for all three cities,' Harris said during committee Thursday. 'Again, it's no fault of theirs that we are here, but we have to deal with this issue.'
Multiple committee members agreed with Harris' amendment, saying that it's the best solution for all three cities, especially because East Chicago and Michigan City would not have to wait multiple years before receiving all the missing funds.
Rep. Gregory Porter, D-Indianapolis, said he's disappointed that representatives were in this position because of a comptroller mistake.
'These are real people's lives,' Porter said. 'It's not just numbers on a chalkboard … I just can't believe that we're sitting here at this point.'
On Thursday, the Ways and Means Committee denied the amendment in an 8-15 vote.
Slager proposed an amendment Thursday that would limit the withholding to $3 million a year. Through the amendment, Slager said it would take Gary about six years to pay the cities back and would have to pay about $18 million.
Harris said Slager's amendment would be more detrimental to all three cities because East Chicago and Michigan City wouldn't receive their full funds until 2030, and $3 million per year is still a substantial amount for Gary.
Slager withdrew the amendment before the committee could vote.
On Wednesday, Harris said he proposed his amendment in case Hammond is affected once 2025 numbers are released. Jennifer Thuma, general counsel for the comptroller's office, previously said 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 wagering tax revenue.
Thuma also said Gary won't receive additional distributions in 2025, according to Post-Tribune archives.
Before amendments were proposed, House Bill 1448 laid out a three-year plan for Gary's payments to East Chicago and Michigan City.
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.
Gary Mayor Eddie Melton, City Controller Celita Green and Common Council Vice President Lori Latham, D-1st, spoke at a Ways and Means Committee meeting on Jan. 22 about how the bill would impact Gary's finances.
Latham told committee members that House Bill 1448 would set Gary back and unravel the city's success.
'It was never really about gaming,' she told committee members on Jan. 22. '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.'
The House of Representatives will vote on House Bill 1448 at a later date.
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