State audit: Cuts alone won’t turn Gary around

GARY, Ind. — State officials say the city of Gary must encourage more economic development if it’s to survive.

The State Board of Accounts says reductions in city revenue because of property tax caps that are now part of the Indiana Constitution mean Gary must grow its tax base if the city is to remain in business.

The city has been allowed to charge the state’s highest property tax rates since 2009 to help its budget, but that exemption ends in 2012.

City leaders have cut spending from $63 million in 2008 to $40 million, but auditors say cuts alone won’t help the city live within its means under the tax caps.

Mayor Rudy Clay tells The Times in Munster that the city is working to attract new businesses and residents.