NewsPublic AffairsPolitics / February 11, 2014

Mayors Insist Tax Elimination Will Hit Hard

Sam Klemet
Mayors Insist Tax Elimination Will Hit Hard

Governor Mike Pence wants the business personal property tax eliminated because neighboring states are doing so.

And he thinks Indiana must follow suit to stay competitive.

“I believe that reform of the business personal property tax will mean jobs for Hoosiers," said Pence. "I have informed legislative leaders that I am open to full state replacement revenue for local governments to cover the cost of eliminating the business personal property tax on small businesses with less than $25,000 in equipment, as proposed in Senate Bill 1. This would ensure that any reform of this tax does not unduly burden local governments or shift the cost of this tax onto hardworking Hoosiers."

But, a bipartisan group of mayors from across the state are concerned about how it will hurt local units of government.

Members of the Indiana Association of Cities and Towns spoke out against the proposal just across the street from the Statehouse where it’s under consideration.

Indianapolis Mayor Greg Ballard says eliminating the tax will hinder city’s abilities to provide quality of life services, which already took a hit during the recession.

"This city receives $25 million from this tax, including nearly $8 million for the Police Department and the Fire Department," said Ballard.  "Marion County School Districts receive nearly $40 million from this tax including $13 million alone for IPS."

Two versions of the bill are under consideration, one in the House and one in the Senate.

Gov. Pence says loss of revenue from eliminating the tax will be made up for in other ways.

But, Kokomo Mayor Greg Goodnight wants to hear specifics.

"We do our best to find ways and find efficiencies, but there is no way I could make up this type of a loss with a local income tax, with use fees," he said.  "The impact would be detrimental and long lasting."

South Bend Mayor Pete Buttigieg says while it may help businesses, it will hurt Hoosier families.

"A lot of homeowners are going to get wacked to the tune of about $143 million, according to the analysis of the Fiscal Policy Institute," he said.  "I don't know a homeowner in South Bend who is ready to be part of taking that on because the legislation hasn't been thought through."