Counties in manufacturing-heavy northeast Indiana will see some of the largest drops statewide in income tax revenues, a report Saturday said.

Whitley County just west of Fort Wayne is projected to lose nearly $4 million, or 37 percent of its income tax revenues, The Journal Gazette of Fort Wayne reported, citing data compiled by Allen County Deputy Auditor Tera Klutz.

Neighboring Wells and Kosciusko counties also were forecast to lose more than 25 percent of their income tax revenues, the newspaper reported. Allen County, the state's largest and home to Fort Wayne, and Adams and Huntington counties also were expected to see losses greater than the statewide average of 15.9 percent, it said.

Almost all Indiana counties will see drops in income tax revenue because of the economic downturn, the data shows.

Without citing percentage losses, the newspaper said Elkhart and LaGrange counties also were projected to lose large portions of their income tax revenue largely because of cuts to the recreational vehicle industry.

John Sampson, president and chief executive officer of the Northeast Indiana Regional Partnership, said northeast Indiana is the top manufacturing region in the top manufacturing state in the country, mainly because of its reliance on the auto industry.

"We have traditionally been hit early and never seem to quite recover because those same type of jobs aren't coming back," Sampson said.

Tax data wasn't available for individual communities, but the newspaper said those in the northeast part of the state should expect large drops in revenue as well.

Matt Bell, executive director of the Regional Chamber of Northeast Indiana, said the challenge for the region is to diversify its economy. That will take time, effort and a regional focus, he said.

"The importance of working together to land new jobs has never been more critical," Bell said.

Both Bell and Sampson said efforts to reverse the trend have begun but it likely will be a slow process.

DeKalb County, just north of Fort Wayne, is the only county in the state projected to see an increase in its income tax revenue next year, the data shows.

DeKalb County Auditor John Fetters said its unemployment rate fell from nearly 18 percent to 11 percent, and the additional jobs created more income tax revenue.

Fetters planned to send letters to communities in DeKalb warning them the good financial news might not continue. He said he will ask them to put the extra money aside and not spend it for a year to see how the economy rebounds.

"We're definitely going to see a hit in the future," he said.


Information from: The Journal Gazette,