Wednesday, February 12, 2014

Star Reports Big Names Weigh in on Tax Debate

From the Indianapolis Star:

The debate over cutting Indiana's business equipment tax is heating up, with heavyweights like Indianapolis Mayor Greg Ballard and automaker General Motors stepping into the fray in recent days.

Ballard joined 30 local government officials from across the state during a press conference Tuesday to voice concerns about proposals pending in the General Assembly that would roll back Indiana’s business personal property tax.

Cutting the business tax would save money for companies, but would increase property taxes for many homeowners and reduce revenue for cities, towns, counties, schools, and libraries.

Ballard said complete elimination of the business equipment tax would cost the city $25.6 million and would cost schools in Marion County $40.7 million.

While neither of the two proposals pending in the legislature go that far, they are widely seen as a first step in that direction.

“It is time to start focusing on building more attractive places to live,” Ballard said, adding that lawmakers should “halt the rush” to cut the business tax.

His comments follow his first public comments on the topic last week in The Indianapolis Star.
On the other side of the debate, automaker General Motors added its voice to those advocating for the tax cut during a hearing Monday before an Indiana House committee.

“For Indiana to be competitive, the personal property tax has to change,” said Brian O’Connell, GM’s regional director of state government relations.

An Indianapolis Star review of state tax records shows that GM stands to save more than $10 million a year if the tax is totally eliminated. GM has six locations, nearly 8,000 employees and 42,000 retirees in Indiana.

Members of the House Ways and Means Committee were considering Senate Bill 1, which would cut the corporate income tax rate and exempt smaller companies from paying the business equipment tax.
The bill already has passed the Senate. The House has passed a separate bill that would give counties the authority to exempt companies that invest in new equipment from paying the tax. Both bills remain alive.

But Senate and House negotiators are working with the governor’s office to find a compromise on the legislation before the General Assembly adjourns on March 14. Gov. Mike Pence has advocated a total elimination of the tax, which generates more than $1 billion for local governments and schools.

O’Connell said both bills would be a “step in the right direction.” But he said the company’s decisions about future investments will be made based on a number of issues, including taxation.
Currently, GM has significant investments in Ohio and Michigan as well. Ohio doesn’t have a personal property tax and Michigan is phasing its out.