Baffled by word count

# E.g. word_count("I am that I am") gets back a dictionary like:
# {'i': 2, 'am': 2, 'that': 1}
# Lowercase the string to make it easier.
# Using .split() on the sentence will give you a list of words.
# In a for loop of that list, you'll have a word that you can
# check for inclusion in the dict (with "if word in dict"-style syntax).
# Or add it to the dict with something like word_dict[word] = 1.
def word_count(string):
    dicto = {}
    split_string = string.lower().split()
    for word in split_string:
        count = 1
        if word in dicto:
            count += 1
            dicto[word] = count
        else:
            dicto[word] = count
    return dicto