Friday, February 21, 2014

Tribune Argues Local Governments Endangered if Business Equipment Tax Lost

From the Kokomo Tribune:

Indiana legislators face a tough challenge as they attempt to deliver a knockout blow to the state’s business personal property tax.

And a lot of the problem can be laid at their own feet, according to a recently released study by the Indiana Fiscal Policy Institute.

The goal of the group — a private, governmental research non-profit — is to enhance government effectiveness and accountability by educating Indiana’s business, labor and government leaders on fiscal policy issues.

The business tax is one of those issues.

Gov. Mike Pence has said abolition of the tax is high on his priority list, and with a strong majority in both houses, Republicans see their way clear to doing just that.

But even the governor has said he doesn’t want to hurt local government or schools, which depend on the tax for a large chunk of revenue.

Most of the discussion has revolved around how to replace any loss rather than simply forcing educators, cities and towns to further tighten their already tight belts.

The problem, as the 36-page institute paper points out, is the state’s property tax cap, first a law and now a constitutional amendment, immensely complicates the chore.