VALPARAISO | Hoping to cut costs for local taxing units while still earning money for the county, Porter County Councilman Mike Bucko has offered up a new tax plan.

The proposal is an alternative to a portion of County Treasurer Jim Murphy's plan that reimburses local taxing units $3.39 million for the interest paid on last year's tax loans. Murphy's plan is funded with money from last year's sale of Porter hospital.

Instead of giving local units the money, Bucko's plan loans municipalities the funds at a rate lower than those of commercial banks -- 2.26 percent. Bucko's plan is uses the hospital proceeds fund.

Bucko has expressed opposition to "just giving away" the money and said his plan allows Porter to continue generating interest on the fund.

"My obligation to the people of the county was to earn money on those proceeds," Bucko said.

After compiling a list of what each taxing unit has borrowed, Bucko calculated the move would save units an overall average of nearly 28 percent, with some areas saving up to 50 percent.

"The interest saved can be used to provide tax reductions or to improve services for taxpayers," Bucko said.

The plan also would eliminate other costs associated with regular borrowing, such as attorneys fees and bond council fees, which can reach thousands of dollars even on small loans, he said.

Bucko also noted the flexibility of his plan. Normal tax loans must be paid back by the end of the year, but with an internal system, the deadlines would not apply. The taxing units also would have easier and cheaper access to additional funds, if needed.

Bucko, who is seeking the spot of county treasurer this year, has been opposed to the idea of paying back full interest to the municipalities. To do that would admit the county was entirely at fault for the delayed bills, Bucko said last week at a council meeting.

"That's not really the whole truth," Bucko said. Many of the problems stemmed from changes and problems on the state level, he said.

"The state was part of the screw-up and now they're charging us money," Bucko said referring to interest payments municipalities make to the bond bank.

Bucko also has advocated distinguishing the money that was borrowed due to the late bills from the loans normally taken out each year by the taxing units.