1 CITY OF GARY SUMMARY OF PLANNED STEPS IN DEALING WITH 2002 REASSESSMENT AND PROPERTY TAX ISSUES June 1, 2004

2 CITY OF GARY Budget Adjustments for 2004 and 2005 $5,416,000 budget cuts for balance of 2004 (7.68% reduction). $8,102,000 budget cuts for 2005 (11.49% reduction). 180 positions to be eliminated. Police and Fire overtime to be paid with Casino Funds - $4 and $5 million in 2004 and 2005, respectfully.

3 CITY OF GARY Other Financial Steps Encourage all taxing units to reduce their budgets by 7.5% and 11.5% in 2004 and 2005, respectfully - the same percentage cuts as the City of Gary. Continue discussions with State Officials to allow the $53 Million USX Settlement to offset 2004 property tax levies instead of 2006.

4 CITY OF GARY Other Financial Steps (Continued) Ask the State (DLGF) to rectify the USX tax abatement on personal property. All government units must aggressively pursue regionalism.

5 CITY OF GARY Comparison of Net Tax Rates 2004 – No Budget Cuts 2004 Scenario 1 – 7.5% Budget Cuts and No USX Settlement 2004 Scenario 2 – 7.5% Budget Cuts and USX Settlement Applied to Tax Levy

6 CITY OF GARY Comparison of Net City Gary Tax Rates 2004 – No Budget Cuts 2004 Scenario 1 – 7.5% Budget Cuts and No USX Settlement 2004 Scenario 2 – 7.5% Budget Cuts and USX Settlement Applied to Tax Levy

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8 CITY OF GARY – CALUMET TOWNSHIP 2003 Net Tax Rate