Tuesday, February 18, 2014

News Reports Shelbyville Council Grants Abatement to KN Platech; Passes Resolution Opposing Phase Out of Personal Property Tax

From the Shelbyville News:

The Shelbyville Common Council voted Monday to approve a tax abatement for KN Platech.

The abatement will relieve personal property tax for $2.1 million in new equipment. The abatement works by relieving 100 percent of the personal property tax for a year, 90 percent the second year and so on for 10 years. After that the company pays the full tax.

The new equipment will expand KN Platech's capabilities and the company promised to hire 20 people. The company makes board coverings used in vehicle trunks and impact absorbers for vehicles. It opened in 2011 and recently expanded its operations.
Attorney Stephen Schrumpf appeared with Human Resources Manager Randy Danhauer.

"We're talking about taking KN's employees up to 100," Schrumpf said.

The factory started with 28 workers and currently has 80 employees.

The abatement passed 5-0, with council members David Carmony and Jason Brown absent.

Before voting on the abatement, the council and Mayor Tom DeBaun had some strong words for the state legislature and Gov. Mike Pence.

The council passed a resolution, 5-0, denouncing plans to phase out personal property tax.

The governor and some legislators want to get rid of the tax on equipment. Two bills are making their way through the Statehouse. Senate Bill 1 would get rid of the tax for businesses with under $25,000 in personal property. House Bill 1001 would give each county an option to remove personal property tax.

DeBaun and the council's concern is that Indiana is on a slippery slope towards eliminating the tax, with no stated way to recoup the costs. Shelbyville, which has a heavy manufacturing base, could lose a significant amount of revenue, as would local schools and county government.

The loss of the personal property tax could also raise real estate property taxes, including homes, if the property hasn't reached the tax cap, and the resolution states a fear of "increased personal income taxes."

DeBaun testified in front of the Indiana House Ways and Means Committee last Wednesday on Senate Bill 1, on trips up to the Statehouse last week to meet legislators and other mayors.

"They are not looking at the total impact," DeBaun said at the council meeting Monday.

Council member Ron Hamilton agreed, calling the legislation "outrageous."

"It was done without consulting local government or caring how they feel about it," he said.