During a speech today outlining his 2014 economic agenda, Gov. Mike Pence again touted the need to phase out Indiana's tax on business equipment — but said he would leave the details to the General Assembly.
Pence said eliminating the tax would encourage new investment in the state and make Indiana more competitive with surrounding states, which have no business personal property tax, are phasing it out, or have lower rates.
The plan would also save millions of dollars annually for some of Indiana's biggest companies, but schools and local governments would lose millions in revenue.
Pence, who has said he doesn't want to "unduly burden" local governments, provided for the first time some examples of how that goal might be accomplished.
Possibilities could include first eliminating the thirty percent depreciation floor or preventing the tax from applying to any new equipment, he said.
"Utilizing time and principals of economic growth," he said, "We can phase out the business personal property tax totally without harming local governments."
After the speech, the governor also suggested that the state could use some other forms of taxation to capture new economic growth.
"I'm actually not advocating for a tax cut," he said. "I'm advocating for tax reform."
Still, Pence said he has "purposefully avoided" laying out a detailed plan. His job, he said, is to cast vision and set up "guardrails" for the discussion.
Republican legislative leaders have expressed support for the concept, but with some reservations.
Senate budget chief Luke Kenley has said it's important that business taxes aren't shifted onto the backs of individuals.
Sen. Jim Merritt, majority caucus chairman, said after the speech that more input is needed from local government.
The upcoming session, which begins Jan. 6 and must end by March 15, "will probably be a learning session," he said. "I don't know if we will have a solution by March 15, but we take this seriously."
The governor also spoke about several other proposals Indiana.
He wants the Indiana Economic Development Corporation to conduct an assessment of the most productive metropolitan areas in the country to determine what quality of life improvements would best attract new jobs. The state would then provide seed funding to spur local and private investment in Indiana's regional cities.
The governor also wants to attract entrepreneurs and plans to encourage the private sector to set up a fund intended to help bring what he called Hoosier "ex-patriots" back to Indiana.
Pence's speech is one of several slated for this month that are intended to provide details about his 2014 legislative agenda.
