HAMMOND | Released in October, a new property tax report developed at the direction of Gov. Mitch Daniels shows Hammond to be among only three Lake County cities and towns with reduced levies this year.

"It's rare for there to be no levy increase," said Hammond City Council President Dan Repay, also director of taxation for Lake County. "When you do have a levy decrease, you reduce the reliance on property taxes."

The city of Hammond showed a 4 percent reduction in its tax levy, followed by Winfield at 3.8 percent and Schererville at 2.9 percent.

At the other end of the spectrum, the town of Dyer showed a rise of 23.9 percent.

"Growing communities may require additional services," Repay said in accounting for Dyer's sharp increase.

For example, police and fire services alone can account for three-quarters of a town's budget.

Repay said the key to the fullest savings is for all of the county's more than 80 taxing units to work together. Reduction by just a few won't do the trick, he said.

In Hammond, while the civil city enjoyed a reduced levy, its school city saw a hike of 17.2 percent.

Karen Wallisch, chief administrator of business services for Hammond schools, said accounting for a large chunk of the increase was an 11.5 percent increase in health care costs, followed by the $4.1 million cost of two new elementary schools.

Because of late property tax distributions, the school city also was forced to pay out more than $1 million in interest on tax anticipation warrants.

"We're having to do this incredible amount of borrowing and borrowing for a longer period of time," Wallisch said. "What taxpayers aren't aware of it's costing them money. It comes out of the debt service fund, and it goes right back to them."

Erroneous assessments also cost the school city almost another $1 million, and its contribution to the 2 percent circuit breaker cost the school city another $863,000, Wallisch said.

"That's lost revenue," she said. "It can't be appealed. It's just gone."

As a result, no school city employee received a raise this year, she said.

Statewide, schools on average account for about half of every property tax dollar. In Lake County, schools appear to account for 37.7 percent, according to the report.

Overall, the change in school levies this year ranged from a reduction of 17.8 percent in Lake Station to an increase of 29.7 percent in Merrillville.