From the Anderson Herald-Bulletin:
The Indiana General Assembly has barely begun, but Gov. Mike Pence’s push for a full elimination of the business personal property tax already appears to be on life support.
House Speaker Brian Bosma, R-Indianapolis, is calling for individual counties to be allowed to voluntarily phase out the tax.
Senate Tax & Finance Committee Chair Brandt Hershman, R-Monticello, is calling for elimination of the tax for small businesses only. Hershman’s cut would save businesses about one-sixth what Pence’s plan calls for.
In theory, getting rid of the tax, which detractors say is essentially a tax on all capital investment, could spur economic activity in a state that has been steadily sliding down the rankings for personal income.
“I can guarantee that the personal property tax isn’t going to be eliminated in this session,” State Rep. Mike Karickhoff, R-Kokomo, told a legislative forum in Kokomo last week. “But long term, it’s in our best interest to find a better revenue stream than business personal property tax.”
Even if neither the House Republicans nor the Senate Republicans support simply getting rid of the tax, which generates just over $1 billion a year for local government, even broaching the idea has caused consternation in Howard County.
About 30 percent of all funding for local government in Howard County comes from property taxes paid on business equipment.
Chrysler Group LLC alone pays almost $21 million a year in business personal property tax to local government and schools in Howard County, most of which couldn’t be shifted onto other taxes, even if that's what local officials wanted.
The state’s Legislative Services Agency, which studied the impact of a total elimination, estimated the average Howard County taxpayer, earning around $40,000 a year, would have to pay an additional $928 a year in local income taxes to make up the lost revenue.
The city of Kokomo would take the biggest hit, in terms of total dollars, losing about 20 percent of its budget to a total elimination, a dollar sum roughly equal to what the city spends on police protection each year.
Northwestern Schools would take an even bigger hit, losing 44 percent of its revenue stream.
That’s why the Indiana Chamber of Commerce, the biggest proponent of the tax shift apart from Pence, has been unequivocal in saying the tax can’t be eliminated without replacement revenue.
“Absolutely no one has called for that money to be taken away without some type of replacement revenue stream,” said the chamber’s vice president of taxation and public finance, Bill Waltz. “There is no way that all personal property tax can be eliminated overnight. That is not going to be the proposal.”
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http://www.heraldbulletin.com/local/x651172494/Business-tax-battle-may-already-be-over
