From the Lafayette Journal & Courier:
Gov. Mike Pence’s desire to eliminate Indiana’s business personal property tax in order to make the state more attractive to new businesses raises the prospect of potential hikes in property taxes for homeowners, farmers and business owners, local officials are warning.
Phasing out the business personal property tax, which is assessed on machinery and equipment, would translate into carving 15 percent from Tippecanoe County’s net assessed value of $6.5 billion, Treasurer Bob Plantenga said. That would mean other taxpayers, including homeowners and businesses, would have to pay more just to collect the same amount of revenue for the county, cities, townships, libraries and schools.
“What will happen,” Lafayette Mayor Tony Roswarski said, “is everybody else’s property taxes in Lafayette will go up — on homes, apartments. They’ll go up until they hit the circuit breaker. Then, when they hit their circuit breaker, the city will start to lose the money.”
Voters recently amended the Indiana Constitution so homeowners’ property taxes cannot be more than 1 percent of their home’s gross assessed value, which is referred to as the circuit breaker. The cap for rentals and farmland is 2 percent of the gross assessed value, and 3 percent for businesses. Property taxes are the primary source of revenue for local governments’ general funds, which pay for government services.
“Once those circuit breakers kick in, we will lose millions,” Roswarski said. “We’d probably have to lay off police, fire, do something with some of our parks, trash pickup.”
These are quality-of-life amenities that attract new businesses and residents that Lafayette might not be able to afford if Pence’s proposal is adopted.
“This could be devastating for Lafayette. ... The communities that have done a good job of attracting industry ... we’re going to get punished the most,” Roswarski said.
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http://www.jconline.com/apps/pbcs.dll/article?AID=2013312170025&nclick_check=1
